Doha, 22 February 2023: Qatar Insurance Company (QIC Group, QIC), the leading insurer in Qatar and the Middle East North African (MENA) region, announced its financial results for the year ended 31 December 2022. Following a meeting of the board of Directors on Tuesday 21st of February 2023, which was presided over by Mr. Khalifa Abdulla Turki Al Subaey, Chairman & Managing Director of QIC Group, the Board approved the financial results. The Group reports gross written premiums (GWP) of QAR 9.8 billion for 2022. However underwriting results from our discontinued business of international operations were severely affected which resulted in the Group reporting a net loss of QAR 637 million compared to a net profit of QAR 630 million for the previous year.
Commenting on QIC’s financial performance in 2022, Mr. Khalifa Abdulla Turki Al Subaey, Chairman and Managing Director stated: “The year 2022 has been characterized by extremely turbulent market conditions as the complex combination of macro-economic, geopolitical and severe natural catastrophes created a yet unseen mix of headwinds for insurers. Within this environment, QIC proved its mettle and further expanded its profitable domestic market business in Qatar and the MENA region. This reflects the ongoing, successful implementation of the group’s strategic plan to de-risk our international operations, expand our low-volatility activities and diversify the business portfolio, as well as cementing the Company’s lead position as a financially strong, adaptable, and secure insurance partner, with a robust capital base for its stakeholders.”
Commenting on the Group's losses, Mr. Salem Khalaf Al-Mannai, Chief Executive Officer of Qatar Insurance Group, added: 'Global financial markets have been affected by the Russian-Ukrainian war, rising interest rates by the US Federal Reserve and central banks around the world and increased volatility. The inflation rate in the UK reached 10.5% in December 2022, the highest rate in 40 years, which affects the cost of compensation and leads to an increase in reserves for the short and medium term. Also, the UK motor insurance market, which accounts for nearly 40% of the Group's business (through Markerstudy, the Gibraltar based entities), has also worsened, with a combined cost ratio of 110% due to inflation, rising prices for spare parts, labour and energy, and the UK's withdrawal from the European Union (Brexit). In addition, premium rates have reached a low level as a result of the intensity of competition between insurance companies to maintain market share.
Currently, negotiations are underway to sell the Gibraltar based entities to a reputable institutional buyer, which is subject to approval by the regulatory authorities.”
Globally, 2022 was a year challenged by unprecedented inflation, geopolitical tensions, supply chain disruptions, frequent and severe natural catastrophe events linked to climate change and a tepid global economic recovery, as the COVID-19 pandemic abated more slowly than was hoped. Inflation and interest rates rose rapidly due to the release of pent-up consumer demand and soaring energy prices. The insurance industry, hit by capital market turbulence, high natural catastrophe losses – including Hurricane Ian, the second highest insured loss in history – and reduced capacity, took a significant hit to technical results, investment incomes and earnings.
Precipitous increases in demand for goods, materials, labour, auto parts and rental vehicles, as well as ongoing supply chain disruptions have been raising claims costs during the year for personal and commercial lines of business.
Within this turbulent environment through 2022, QIC succeeded to further expand its profitable domestic market business in Qatar and the MENA region, while reducing the exposure to high volatile severity risks in its international operations.
QIC Group reported gross written premiums of QAR 9.8 billion, with 45% of GWP emanating from personal lines insurance written in the Middle East, U.K. and Continental Europe.
In 2022, QIC’s international operations – Qatar Re, Antares and QIC Europe Limited (QEL) – accounted for approximately 71% of the Company’s total GWP, contributing gross written premiums of QAR 7 billion to QIC Group’s top line. The global insurance business however remained highly volatile during the year, where unseen combination of major headwinds challenged the insurance industry arising from unprecedented inflation and geopolitical tensions. Inflation which peaked record levels in recent history, drove the claims ratio for the discontinued and legacy business of the Group, which had a direct impact to the underwriting income. Geopolitical tensions, in particular the Russian war on Ukraine, and the outflow from the COVID-19 pandemic continue to drive supply-chain disruptions and energy prices. Against this backdrop, underwriting results from our discontinued business of international operations were severely affected, which was large enough to impact the strong bottom line achieved in the remaining continued business. The Group's loss after tax on non-continuing operations amounted to QAR 859 million. The decision to discontinue such volatile business is already showing positive results as the negative impact of the discontinued business wanes incrementally as we progress into the new underwriting years.
QIC’s domestic and MENA operations continues to be highly attractive, providing strong top- and bottom-line results to the Company, contributing a gross written premiums of QAR 2.8 billion, an increase of 18% from 2021.
The Group’s net underwriting profit for 2022 was QAR 25 million as against a net underwriting profit of QAR 643 million in 2021.
QIC continued its commitment to operate as efficiently as possible for the benefit of both its policyholders and shareholders. We succeeded in steadily trimming our cost ratio over the past years and continued that route through 2022. The Company further improved its already exceptional operational efficiency, achieving a healthy expense ratio for its core operations of 5.3%, a further reduction from 5.9% in 2021.
Despite financial market turmoil, as both equity and fixed income markets declined in tandem, the Company generated net investment income and other income of QAR 834 million for 2022. On a year-to-year basis, the investment yield came in at 4.8%.
For the full year of 2022, the Group reported a consolidated net loss of QAR 637 million compared to a net profit of QAR 630 million for the previous year.
Expand our footprint in direct MENA insurance business.
As part of our strategy to expand our presence in the direct insurance market of the Gulf Cooperation Council (GCC) and Maghreb, QIC through its Oman subsidiary, Oman Qatar Insurance SAOG (OQIC) have recently completed the acquisition of a leading Omani national insurer- Vision Insurance SAOG.
Oman’s stable political, social and economic environment marked with good governance, provides positive growth outlook of the insurance sector. In this context, this key landmark acquisition provides a good opportunity to expand QIC’s footprint in the profitable direct-line insurance market within the Gulf Cooperation Council (GCC) region.
QIC Group underlines its recognition as the MENA region’s top investment house.
In 2022, QIC’s investment team once again demonstrated its quality as the MENA region’s leading investment house, focusing on both sector balance and security of investments. Despite financial market turmoil, as both equity and fixed income markets declined in tandem, the Company generated a healthy investment yield of 4.8% for the year 2022. Further highlighting this strength, Antares Managing Agency Ltd (“Antares”), the Lloyd’s specialist insurance and reinsurance subsidiary of QIC, topped the J.P. Morgan Asset Management’s Lloyd’s Peer Analysis, achieving an average annual investment return of 3.6% against the syndicate peer average of 1.6%, based on a three-year average investment return over the period from financial year 2019 to 2021. QIC was also ranked “Top Investment House” for the fourth year in a row by The Asset magazine.
Further expanding and enhancing the Company’s investment management footprint, 2022 saw the establishment of Epicure Islamic Investment Management LLC, jointly owned by QIC (51% through Epicure Holdings LLC) and QInvest (49%). Authorised and regulated by Qatar Financial Centre Regulatory Authority (QFCRA), the new entity is Sharia’a compliant and will focus on providing a wide range of Islamic asset management solutions.
QIC earned several awards for its expertise, digitalization capabilities and innovation leadership.
QIC is committed to creating efficient digital capabilities and improving customer experience, expanding and reshaping digital insurance landscape in the MENA region through innovation and investment in digitalization platforms.
In recognition of QIC’s significant progress made in digitization capabilities, the Company was awarded numerous accolades in 2022, including “Best Online Insurance Company in The Middle East” at The Global Banking & Finance Review Awards 2022, “Domestic General Insurer of The Year” & “Auto Insurance Initiative of The Year” in the Qatar awards at the Insurance Asia Awards 2022, and “Insurer of The Year in Qatar” for the second consecutive year at The MENA IR Awards 2023.
QIC’s positioning as the MENA region’s most advanced digital insurer, once again showed its value as its domestic companies continued to attract new business in the waning and post-pandemic environment. Digital solutions are proving to be an important and preferred aspect of personal lines insurance sales.
Anoud Technologies implements ACORD Solutions Group’s ADEPT to drive digital data exchange.
Over the past years, QIC has successfully positioned itself as a technology leader in the insurance sphere. Anoud Technologies (Anoud Tech), a subsidiary of QIC Group and leading international insurance software solutions provider, successfully deployed and implemented the ACORD Data Exchange Platform and Translator (ADEPT) platform, providing a global platform for real-time data exchange, translation and transformation, connecting stakeholders across the industry. The integration of ADEPT into the Anoud+ Insurance platform allows insurance clients to send and receive ACORD Global Reinsurance and Large Commercial (GRLC) Accounting (EBOT) and Claims (ECOT) messages with their digitally enabled inward and outward trading partners.
ESG and sustainability
In 2022, QIC developed an ESG framework which was approved by the Board, established an ESG and Sustainability Committee to focus and channel the Company’s ESG goals and announced its commitment to support Qatar’s endeavour under the Paris Agreement to reduce by 2030 the country’s greenhouse gas emissions by 25%. Taking its commitment to ESG further, 2022 saw QIC become the first insurer in the Middle East to sign the United Nations Environment Programme-Finance Initiative’s Principles for Sustainable Insurance (UNEP-FI PSI). With this, QIC joins a global network of insurance stakeholders committed to integrating ESG along their value chain.