UAE: Orient posts 4.4% increase in net profit to $77m for 1H2020
Source: Middle East Insurance Review | Sep 2020
Orient Insurance has posted net profit of AED282.3m ($76.9m) for 1H2020, up from AED270.3m for the 1H2019, noted S&P Global Ratings.
The increase was 4.4%, despite the economic impact of the COVID-19 pandemic. Profit growth was “mainly thanks to strong operating performance as a result of fewer claims and cost savings from the company’s ongoing digital transformation”, said S&P.
The rating agency also said that Orient reported stronger-than-expected GWP growth and higher net earnings in 1H2020, despite the pandemic and lower oil prices.
Orient’s GWP increased 13.8% to AED2.56bn in the first half of 2020 from AED2.25bn during the corresponding half in 2019. This resulted from the company’s expansion across all business lines, despite a lockdown for several weeks during this period.
The use of digital channels enabled Orient to consolidate the operations of seven branches in the UAE. Although, in line with S&P’s expectations, Orient reported a modest decline in investment income, mainly due to a decline in interest rates and unrealised losses on equity investments, the company’s investments were still profitable.
Shareholders’ equity increased to AED3.2bn as of mid-year 2020 from AED2.9bn at mid-year 2019.
As a result of weak economic conditions in the UAE, S&P anticipates that Orient’s GWP growth will moderate to about 10% for the full year 2020, while net profit will exceed AED425m, despite ongoing volatility in equity markets. M
AED1 = $0.27