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QIC Group reports net profit growth of 54% to QAR 474 million for first nine months of 2018
QIC Group reports net profit growth of 54% to QAR 474 million for first nine months of 2018
  • The Group’s net underwriting result increased to QAR 378 million, compared with a to a loss of QAR 103 million for the same period last year
  • QIC Group is constantly expanding its low severity high frequency business which now constitutes a significant portion of the total portfolio.
Doha, Qatar, October 24, 2018:  Qatar Insurance Group, the leading insurer in Qatar and the Middle East North African (MENA) region yesterday announced its financial results for the first nine months ended September 30, 2018. Following a meeting of the Board of Directors, which was presided over by Sheikh Khalid bin Mohammed bin Ali Al-Thani, Chairman & Managing Director of the Board of Directors, the Board approved the financial results.
 
The MENA markets continued to produce stable premiums with underwriting profitability, weathering geopolitical headwinds in the region. Consistent with previous quarters, QIC Group’s international operations further expanded in select low volatility classes whilst shedding underpriced (severity) business. 
 
In the first nine months of 2018 QIC Group recorded growth in Gross Written Premiums (GWP) of 6% to QAR 9.5 billion, compared to the same period of the previous year. The Group’s international carriers namely Qatar Re, Antares and QIC Europe Limited (QEL) posted GWP growth of 11% to QAR 7.3 billion. QIC Group ’s domestic and MENA operations growth remained stable, while the Company’s Life and Medical insurance subsidiary, QLM, headquartered in Doha, and OQIC, the Group’s listed subsidiary in Oman, continued to expand. Further impetus for growth arose from the ongoing digitalization of the Group’s MENA retail pillar. QIC Group’s international subsidiaries in Bermuda, the UK and Malta accounted for approximately 76% of the Group’s total GWP.
 
The Group’s net underwriting result increased to QAR 378 million, compared with a negative QAR 103 million for the same period last year, the third quarter of which saw the devastating series of major hurricanes (Harvey, Irma, Maria). QIC Group diligently applies its recently adopted strengthened reserving governance and philosophy, resulting in a more cautious view on market projections. QIC Group is constantly expanding its low severity high frequency business which now constitutes a significant portion of the total portfolio. 
 
Investment income came in at QAR 615 million in the first nine months of 2018, compared with QAR 798 million in the same period of the previous year. The 23% y-o-y decline is mainly attributed to certain one-off investment gains booked in H1 2017. Further reclassification of certain types of investment securities following the adoption of IFRS 9 from 1 January 2018 resulted in increased mark-to-market losses in the first nine months of 2018. 
 
Overall, the Group’s net profit reported a growth of 54% for the first nine months of 2018 and stood at QAR 474 million, compared with QAR 308 million in the same period last year.
 
During the nine month reporting period, QIC Group further improved its already exceptional operational efficiency. As a result of which the administrative expense ratio for its core operations came in at 6.5%, down from 6.6% in the same period of the previous year. The Group continues to reap the benefits from its ongoing endeavor towards process efficiencies and automation.
 
Further cost-efficiency gains are expected from the envisaged integration of back office operations across QIC Group’s international entities. In addition, a concerted approach to retrocession buying will benefit the Group’s underwriting result.
 
Through the acquisition of Markerstudy Group Insurance companies (announced in January) by its subsidiary Qatar Re, this transaction marked a milestone in the Group’s shift towards low volatility business.
 
On the other hand, the Board of Directors decided not to proceed with the board resolution in meeting No. (3/2018) held on 5/6/2018 regarding Company’s shares buy-back, as the main purpose of that decision no longer exists, nearly five months has passed without finalization of the required procedures. The cancellation of buy-back decision has been arrived after a detailed consideration of company’s long term vision, regulatory framework governing buy-backs in Qatar, as well as the recent changes in the Qatar Exchange index constituents impacting QIC’s share price and liquidity.    
 
Commenting on the financial performance for the first nine months of 2018, Mr. Khalifa Abdulla Turki Al Subaey, Group President & CEO of QIC Group stated, “The third quarter of 2018 saw a string of major catastrophes losses, especially in the US and Japan.  Still, rate increases remain elusive as the growth of alternative capital with lower return hurdles places secular and not just cyclical pressure on (re)insurance margins in the low frequency high severity space.
 
Against this backdrop, we continue rebuilding our book of business towards low volatility characteristics, focusing on clients who pursue an innovative and analytical approach to product development and underwriting.”
 
He further continued, “Through our direction to achieve the Group’s growth strategy we have to deal with challenges beyond our control such as the geopolitical situation in the Middle East and the vagaries of global re/insurance loss and pricing cycles. Therefore, QIC Group is redoubling its efforts to excel in an area which counts among our historical strengths -cost-efficiency. In that respect, we consider ourselves a forerunner among our global peers some of which have recently embarked on major restructuring plans.”   
 
 

Posted by : Qatar and Doha City PR Network Editorial Team
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PR Category : Banking & Investments
Posted on : Wednesday, October 24, 2018  9:12:00 AM UAE local time (GMT+4)
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