Shareholders of Qatar Insurance Group have approved an increase in the company’s capital to QAR2.77 billion (US$760.8 million) from QAR2.41 billion. The approval was given at the company’s annual general meeting on 19 February.
The capital increase is through a bonus issue of three shares for every 20 held.
Despite sluggish economic growth and fluctuating commodity prices, the Group recorded strong operational performance, coupled with robust premium growth, taking GWP to QAR9.9 billion for 2016, an increase of 19% y-o-y.
Consolidated net profit for the full year 2016 totalled QAR1.03 billion. The underwriting gains for the Group for 2016 was QAR844 million, while net investment income stood at QAR925 million.
Key contributors to the reported growth were the Group’s dedicated global reinsurance and specialty insurance subsidiaries, as well as the life and medical segments of the business emanating from the Middle East.
The international subsidiaries in Bermuda, London and Malta grew at a rate of 18% and now account for approximately 70% of the Group’s total GWP.
Qatar Re’s net income jumps 52.3%
Bermuda-based Qatar Re, the reinsurance arm of Qatar Insurance Company, posted a 52.3% jump in net income to $38.0 million for 2016, driven largely by a strong improvement in net investment income which experienced a three-fold increase from $10.7 million in 2015 to $32.7 million in 2016.
Net underwriting results, though, fell to $54 million in 2016 from $64.7 million in 2015, said the company in a statement. The loss ratio on the company’s net earned premiums increased from 67.6% in 2015 to 72.9%. 2016 was characterised by an unusually high frequency of large man-made losses, as well as sizeable catastrophe losses such as Hurricane Matthew and earthquake activity in New Zealand, the statement said.
GWP grew by 8.1% y-o-y to $1.25 billion in 2016 and net earned premiums stood at $351 million last year, up 43% from $245 million in 2015. This was achieved despite the company staying away from business that was no longer considered attractive and despite the sharp depreciation of the British pound.
Mr Gunther Saacke, Qatar Re’s CEO, said: “In 2016, our focus was on consolidating Qatar Re’s book of business in what has been a continuously degrading market environment. In line with our expectations, the pace of our premium growth has slowed as we focus on maintaining price adequacy. Whilst it has been necessary to withdraw from certain underpriced business, we were successful in replacing it with more attractive risks, primarily emanating from highly specialist reinsurance transactions and bespoke support of insurance entrepreneurs.
“Qatar Re is not a market-tracking reinsurer, meaning that we are well-placed to weather the effects of irrational price competition, supported by our growing and globally diversified multi-line franchise.”
QAR1 = US$0.27