Dubai-headquartered Oman Insurance Company (OIC) has posted a net profit of AED190.5m ($51.9m) for 2019, up 1,786.1% y-o-y, making it the best performing year for the company since 2014, according to a corporate statement.
OIC attributed the strong financial results in 2019 to its forward-looking strategies set out in 2018 and with placing its primary focus on customer satisfaction. This was achieved despite a challenging environment, with downward pressure on prices and, more than ever, the collection of premiums being a constant issue, the insurer said.
In comparison, net profit for 2018 amounted to AED10.1m as against AED104.5m in 2017m, according to the company’s 2018 annual report. OIC attributed the profit decline to the implementation of new accounting principles (IFRS 9-Financial Instruments), as well as one-off proactive measures to bolster claim reserving in 2018. OIC said the actions taken allowed it to strengthen its balance sheet and future earnings.
In 2019, OIC’s GWP fell by 4.1% to AED3.55bn, compared to AED3.70bn in 2018, due to a conscious decision to undertake selective underwriting and to prune loss-making accounts in efforts to deliver sustainable profitability.
Net earned premiums amounted to AED1.64bn in 2019, reflecting an increase of 4.3% over 2018. “This level of earned premiums confirms our clear leading position as a primary insurer amongst listed companies in the UAE, which is in alignment with our strategy to better select risks and retain healthier risks on our balance sheet,” said the insurer.
Its proactive measures also helped in increasing underwriting profit by 14.7% to AED432.0m in 2019. In addition, a balanced investment strategy and fresh cashflow deployment resulted in investment income being the highest in 2019 compared to last five years.
OIC said its strong emphasis on collections and credit management have reduced net receivables by 12% to AED587.5m in 2019. “As a result of strategic actions, our solvency margin has now reached its highest level in the past years at approximately 225%, which further strengthens our ability to meet policyholders’ obligations.” M
AED1 = $0.27