Middle East News - Bahrain: Arig streamlines operations
Source: Middle East Insurance Review | Mar 2016
Arig Group is streamlining its operations for better performance and capital efficiency, said CEO Yassir Albaharna as a challenging market environment left a mark on its financial results for 2015.
Loss events, overcapacity in the reinsurance market and lower investment returns resulted in a US$4.4 million loss to the Arig Group last year, compared to profits of $15.6 million in 2014.
Parent company Arig and its corporate member at Lloyd’s generated gains of $2.1 million from underwriting activities against $14.3 million in 2014, whereas Arig subsidiary Takaful Re produced a loss of $1.3 million (2014: loss of $8.3 million) to the Group. Investment returns reached $14.3 million, down 30.2% y-o-y, as markets declined towards the end of 2015.
Arig’s GWP fell by 30.1% y-o-y to $220.4 million as a result of shifts in the Lloyd’s portfolio, cyclical cutbacks and exchange rate developments. A series of mid-size insurance losses and the reduced premium pool pushed the Group’s combined ratio up to 106.6%, compared to 2014’s 101.7%.
Mr Albaharna said: “We are obviously not satisfied with our 2015 result and are streamlining the Group for better performance and capital efficiency. It was therefore decided that Takaful Re, in which we hold a 54% stake, should cease underwriting. Equally we are revisiting activities that have remained below our expectations while boosting those with strong returns.”
Arig’s shareholders’ equity stood at $244.2 million on 31 December 2015, compared to $264.5 million at the end of 2014.