Bahrain: Testing environment leaves mark on Arig's 9M returns
Source: Middle East Insurance Review | Dec 2015
Global overcapacities, earthquake losses from Nepal and a swing in the equity markets jointly pushed the Arig Group’s net profits down to US$1.4 million nine months into 2015, from $9.6 million recorded in the same period last year.
Arig and its corporate member at Lloyd’s contributed a profit of $5.5 million in the first nine months of 2015, down 53.4% y-o-y, while its subsidiary Takaful Re returned a loss of $3.9 million as against $2.2 million during the same period a year ago. Net result for the third quarter alone was a loss of $4.8 million, compared to third quarter 2014 net profit of $4.9 million.
The Group’s underwriting result grew by 85.7% y-o-y to $2.6 million for the period based on a combined ratio of 97.1%. Income from investments stood at $10.1 million, down 47.7% y-o-y, following a worldwide swing in share prices during the third quarter of 2015.
Gross premiums over the nine-month period fell by 28.7% y-o-y to $212.6 million as shifts in Arig’s Lloyd’s portfolio, voluntary premium cutbacks by Takaful Re and the influence of exchange rate developments contributed to the reduction. The Group wrote gross premiums of $26.5 million during the third quarter, compared to $61.2 million in the same period last year.
Mr Yassir Albaharna, CEO of Arig, said: “The recent turmoil in financial markets has been a challenge to many, but we continue to follow a conservative investment policy. On another front, a special shareholders’ meeting for Takaful Re is being called next month since Arig did not receive unanimous approval to the offer made to purchase the minority shares. This is an important move towards enhancing the Group’s earnings potential.”
Arig’s shareholders’ equity stood at $253.0 million at 30 September 2015, compared to $264.5 million at the end of 2014. Book value per share was $1.28 at the end of the third financial quarter 2015, as against $1.34 at the end of last year.