Posted on July 25, 2017

Qatar Insurance Company (QIC), the leading insurer in Qatar and the Middle East North Africa (MENA) region, announced its financial results following a meeting of the Board of Directors on 25 July 2017. Presided over by Sheikh Khalid bin Mohammed bin Ali Al-Thani, Chairman and Managing Director, the Board approved the audited financial results and the Independent Auditor’s report for H1 2017.

The Group recorded a growth of 14% in gross written premiums (GWP) to QAR 6.24 billion in the six months ended 30 June 2017. Against the backdrop of a politically driven investment and ultra-soft underwriting environment, QIC Group’s net profit amounted to QAR 505 million for the first six months of 2017, compared with QAR 602 million for the same period of the previous year.

This performance reflects QIC Group’s steady and systematic expansion across its global and regional target markets, lines of business and client segments. QIC Group’s international operations, namely its global reinsurance subsidiary Qatar Re (based in Bermuda), London-based specialty insurer Antares and Malta-based subsidiary QIC Europe Limited (QEL) were instrumental in growing the Group’s volume of business. During the first half of 2017, these subsidiaries contributed 89% to the Group’s combined premium growth. As at 30 June 2017, Qatar Re, Antares and QEL accounted for 71% of QIC Group’s total premium volume, up from a 69% share a year ago.

In its domestic market, Q Life and Medical Insurance Company (QLM) contributed significantly to the Group’s performance, growing its premium income to QAR 694 million (up 17%) for the first six months of 2017. Premium income from the countries involved in the political standoff with Qatar does not represent a material portion of the Group’s revenues.

QIC Group’s net underwriting result came in at QAR 263 million for the first half of 2017 (vs. QAR 438 million in H1 2016). The half-year performance was materially affected by the UK Government’s decision to drastically cut the Ogden Discount Rate, which shook up the UK motor insurance market, with an expected industry-wide reserving hit of over USD 10 billion. QIC Group has a major underwriting footprint in the UK and decided to strengthen its motor reserves by USD 31 million. In addition, first half performance was impacted by a few large risk losses in the Group’s international operations.

Despite continued global financial market volatility and regional diplomatic and economic turbulence, QIC Group generated robust investment income of QAR 563 million in the first six months of 2017 compared with QAR 480 million in the same period last year. The annualised return on investment amounted to 5.7% for the first half of 2017, which is significantly in excess of the global industry average. QIC Group’s investment exposure to the countries involved in a diplomatic rift with Qatar is minimal. Most regional and international observers do not expect any material adverse impact of the political standoff on Qatar’s economic growth performance, even under a prolonged scenario.

The implementation of effective cost control policies, in combination with an accelerated pace of work process automation resulted in a slight decrease in the administration expense ratio to 7.9% against 8.1% during the same period in 2016. As at 30 June 2017, QIC Group’s shareholders’ equity stood at QAR 8.405 billion, compared with QAR 8.468 billion a year earlier. In Q1 2017, the Group, via Qatar Re, successfully issued Tier 2 capital notes net amounting to QAR 1.619 billion. The issue was 14 times oversubscribed.

Mr. Khalifa Abdulla Turki Al Subaey (pictured), Group President & CEO of QIC Group commented, “The financial results for the first half of 2017 clearly demonstrate the effectiveness of QIC Group’s diversification strategy which is predicated on tapping into global growth opportunities whilst maintaining our leading position in our home markets. With minimal exposure in the countries involved in a diplomatic rift with Qatar, it is business as usual for us.” Offering a conservative outlook for the remainder of 2017, Mr. Al Subaey continued, “In line with our business objectives, we will continue to adapt to the changing environment and renew our focus on a bottom line driven and sustainable growth strategy for QIC Group.”