Kuwait: Restructuring pays off for Kuwait Re with US$12-mln earnings
Source: Middle East Insurance Review | Apr 2016
Kuwait Re has reported profits before tax of KWD3.5 million (US$11.6 million) for 2015, a huge improvement from the KWD41,000 net pre-tax profit posted in 2014, following a restructuring of its business portfolio.
The reinsurer’s premiums increased by 15% to KWD39.6 million, up from KWD34.3 million in 2014. Combined ratio reached 93.4% for the year.
Investment income for 2015 was KWD2.3 million (KWD1.9 million in 2014), from total invested assets of KWD72.2 million (KWD69.0 million in 2014). Shareholders’ equity stood at KWD42.1 million at 31 December 2015 compared to KWD40.4 million at the end of 2014.
In a statement, Mr Amir Muhanna, CEO of Kuwait Re, said: “In the given difficult market conditions, we have been gradually restructuring our portfolio to tilt more towards facultative and non-proportional treaty business with emphasis on geographic and class diversity to reduce the potential of adverse volatility in results.
“Simultaneously, we have been exiting from pro-rata treaty contracts that have not delivered the expected margins. The prevailing challenges on all fronts warrant vigilance and we are flexible enough to direct our resources to where the opportunities arise.”
The statement also said: “As in the past few years, reinsurance markets remain very competitive during 2015, due to an abundance of capacity in excess of demand. Absence of market-moving events such as natural catastrophes has also contributed to the soft pricing conditions. Although the rapid decline in reinsurance pricing has slowed down, we are yet to see the end of it.”
Last year, Al Ahleia Insurance increased its shareholding in Kuwait Re from 30.0% to 91.7%.
KWD1 = US$3.32