Bupa Arabia for Cooperative Insurance, among Saudi Arabia's top insurers in terms of premiums, has posted net profit before zakat and tax attributable to shareholders of SAR525.4m ($140m) for 2018, a rise of 5% year-on-year, due to higher net underwriting results.
Net earned premium rose by 6.2% to SAR8.2bn in 2018, compared to 2017. Gross written premium expanded by 10.8% to SAR8.6bn, with the growth rate double that of the industry average of 5.2%. Investment income also jumped 16.4% to SAR184.2m last year.
The directors say in the company's 2018 annual report, “In 2018 Bupa Arabia had a good trading year, in spite of the overall economic challenges, a shrinking health insurance market, and the insurance sector’s overall lacklustre performance. Bupa Arabia increased its written premiums by 10.8% over 2017, due to healthy pricing and good growth in new business, and achieved a record written premium level of SAR8.6bn.
“The 2018 investment income results represent another record year for Bupa Arabia, with a y-o-y growth of 16.6% achieved, driven mainly by an increased portfolio, an increase in cash and fixed income yields, and further supported by a rising interest rate environment.
2018 was also a record year for collections, in line with the record level of written premium, with a total of SAR8.5bn collected during the year. However, the provision for bad debts was higher in 2018, in part as a result of the economic situation and its impact on lapsed debt, but also due to the timing of the bad debt provision versus business growth, as well as an overall increase in the aging of receivables, the report says.
During 2018, Bupa Arabia paid FY2017 dividends to its shareholders of SAR160m (a pay-out ratio of 32%), versus the SAR120m (a pay-out ratio of 19%) paid in 2017 for FY2016. The company also distributed, during November 2018, bonus shares, with one bonus share for every two shares held, thereby increasing its capital by SAR400m to SAR1.2bn, an increase of 50%.