In a market characterised by global oversupply, Arig achieved net profits of US$15.6 million for the Group in 2014, down 16.1% y-o-y. While its Islamic reinsurance subsidiary, Takaful Re, produced a loss of $4.9 million as against a loss of $4.4 million, Arig’s conventional reinsurance operations continued to perform well with net profits of $20.5 million in 2014, compared to $24.0 million in 2013.
Group net profit for the fourth quarter 2014 remained flat at $6.0 million.
Consolidated gross premiums grew by 20.3% y-o-y to $315.3 million over the reporting period, while net written premiums rose 6% to $260.4 million. Conventional premiums made up 94% of the Group’s premiums, with Takaful Re accounting for the rest.
Arig’s combined ratio was 97.8% for the year, while Takaful Re recorded a ratio of 147%, increasing the Group’s overall combined ratio to 101.7%.
Investments generated $20.5 million of profit, marginally higher than the previous year’s $20.4 million.
Mr Yassir Albaharna, CEO of Arig, said: “The majority of Arig’s reinsurance portfolio performed well in a challenging market where we have seen risk premiums reducing year by year. Apart from the underwriting result, we are pleased to see our investment result holding up, while we are pursuing a strategy that protects our stakeholders’ capital. Regrettably, and in spite of the measures taken in the past, Takaful Re continues to be a drag on the Group’s performance. We are currently engaged in active discussions to decide on a solution that would safeguard the future profitability of our re-takaful interest.”
Arig’s Board of Directors has recommended a cash dividend of 5% on the company’s paid-up capital, or 5 cents per share.
The dividend remains subject to clearance by the Central Bank of Bahrain and shareholders’ approval at the company’s Annual General Meeting, to be held on 23 March 2015.
Arig’s shareholders’ equity increased by 6.1% y-o-y to $264.5 million at the end of 2014, with a book value per share of $1.34 compared to $1.26 in 2013.