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UAE: Green Crescent affected by investment losses

Source: Middle East Insurance Review | Sep 2015

Green Crescent Insurance has reported a net loss of AED5.1 million (US$1.39 million) for the first half of this year, compared to a net loss of AED184,000 for the corresponding period last year, according to statements filed with the Abu Dhabi Securities Market. The significant increase in net loss was attributed to a plunge in investment gains.
   In a statement, the company said that it changed its investment strategy last year in line with the UAE Insurance Authority’s new financial regulations, leading to a 90% y-o-y reduction in investment income to AED935,000 in the first half of 2015.
   The first quarter of 2015 showed a net loss of AED2.16 million, compared to a net profit of AED6.3 million during the same period of 2014. In the second quarter, losses widened to about AED3 million compared to AED6.5 million for the corresponding quarter of last year.
   The health insurer said: “In the ever-competitive UAE health insurance market, the company remained focused on the profitability of each customer and as a result, we continue to decrease the size of our portfolio due to price competition, with declines in revenue and GWP while substantially preserving underwriting margins versus the same period last year.
   “Overall, the company’s revenue decreased by 39% in the period ended 30 June 2015 when compared to the last period while underwriting margins fell by 3% period to period to AED6.4 million. We anticipate this trend to continue as competitors capture customers with unsustainable pricing while healthcare cost inflation continues unabated.”
   Green Crescent cut its general and administrative expenses by 21% to AED12.48 million in the first half of the year.
   Last September, the insurer formed a strategic alliance with AXA Mediterranean Holding and Kanoo Group by issuing them convertible bonds of AED99.5 million. Its paid-up capital stood at AED100 million and accumulated losses amounted to AED33.5 million at 30 June this year.
 
AED1 = US$0.27
 
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