News Middle East25 Jan 2018

Qatar:MENA to contribute 20% of insurance group's total premiums

25 Jan 2018

Qatar Insurance Group (QIC Group), a leading insurer in the Middle East and North Africa, has said that the contribution of the region to its total business would soon be less than 20%, as the group's global expansion and diversification strategy is progressing according to plan.

The expansion is recently boosted by the acquisition of Markerstudy Group’s Gibraltar-based insurance companies by the reinsurance arm, Qatar Re, that is subject to regulatory approvals. Markerstudy underwrites more than 5% of the UK motor insurance market, generating annual premiums of about GBP750 million (US$1.05 billion).

“Including the Markerstudy companies, the share of QIC Group’s non-MENA business will soon exceed 80%,” said Mr Khalifa Abdulla Turki al-Subaey, QIC Group President and Chief Executive. In 2011, QIC Group’s non-MENA business represented just 20% of its total portfolio.

Mr Al Subaey said that the group has successfully repositioned Qatar Re as a global player and Antares as its Lloyd’s specialty platform.

He said: “Through our subsidiaries Qatar Re and Antares, we are well positioned to benefit from any cyclical upturn in global specialty and other non-motor (re)insurance markets. The Markerstudy transaction will enable QIC Group to continue writing UK business under any post-Brexit scenario.”

The main strategic attraction of the Markerstudy acquisition is the addition of a sizeable lower volatility book of the UK motor insurance business with predictable and long-term profitability, he said.

“A carefully managed exposure to the UK motor market adds lower-volatility business that balances Qatar Re’s more volatile reinsurance lines.”

Looking towards the future, Mr Al Subaey said: “We will continue to prudently pursue our global expansion and diversification strategy whilst further consolidating our leadership position in the MENA region. Through our subsidiaries and growth engines Qatar Re, Antares and QIC Europe Limited (QEL), QIC Group has established a meaningful presence in key international insurance and reinsurance centres such as Bermuda, London, Zurich, Malta, Singapore and Shanghai.”

Financial performance in 2017

Meanwhile, QIC Group has reported premium growth of 18% to US$3,203 million for the financial year ended 31 December 2017, compared to 2016.

Sheikh Khalid bin Mohammed bin Ali Al Thani, Chairman and Managing Director of QIC Group, said that 2017 was a challenging year for the global insurance industry due to the exceptional natural catastrophe events impacting the US, namely Harvey, Irma and Maria (HIM) windstorms.

Another major event that adversely impacted insurers operating in the UK insurance market, where QIC Group also had exposure through its international operations, was the sharp and unexpected reduction of the Ogden discount rate in the UK in the first quarter in 2017 which forced insurers to increase their loss reserves. The industry-wide impact of Ogden is estimated to be a $10-billion increase in loss reserves. The unprecedented losses are well within QIC’s risk appetite and tolerance limits.

However, the combined impact was only an earnings event and did not affect QIC Group’s solvency from a regulatory, ratings or internal capital adequacy point of view.

Against this adverse backdrop, QIC Group generated a net underwriting result of $32 million in 2017, down by 86% compared with the previous year. QIC Group’s consolidated net profit for the full year 2017 stood at $115 million, compared to $284 million for 2016.

The Group’s key growth engines were Qatar Re, Antares and QEL which now account for approximately 75% of the Group’s total GWP. Domestically, Q Life and Medical Insurance Company, the dominant life and medical insurance company in Qatar, added buoyancy to the Group’s overall performance. 

Despite political and other unrelated economic turbulence in the Middle East, QIC Group’s net investment gains amounted to $248 million in 2017, up 11.3% year-on-year.

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