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Gross written premiums for the nine months reach USD 2.7 billion – International

Gross written premiums for the nine months reach USD 2.7 billion – International

Oct 29, 2019 (0) comment

QIC-Qatar

Qatar Insurance Group, the leading insurer in Qatar and the Middle East North African (MENA) region reports a net profit of USD 137 million for the first nine months of 2019. The MENA markets continued to produce stable premiums with underwriting profitability, weathering geopolitical headwinds in the region. QIC Group’s international operations further expanded in select low volatility classes. Compared with the first nine months of 2018, the Group’s gross written premiums expanded by 3% to USD 2.7 billion. The Group’s net underwriting result improved by 11% to USD 115 million, compared with 104 million for the same period last year. QIC Group reported a combined ratio of 101.5% for the first nine months of 2019, compared with 102% in the previous year. Excluding the impact of reserve developments as a result of changes to the Ogden discount rate in the UK, the underlying combined ratio for the first nine months of 2019 was 99.3%.

Commenting on the financial performance for first nine months of 2019, Mr. Khalifa Abdulla Turki Al Subaey, Group President & CEO of QIC Group stated, “We continue to execute on our strategic shift towards lower volatility segments of the international markets. QIC’s stable underwriting profitability testifies to the attractive economics of this business, with relatively stable and predictable margins.”

He further continued, “The Group’s near-term outlook remains cautiously optimistic. Our exposure to the geopolitical situation in the Middle East and the vagaries of global re/insurance pricing is relatively moderate. As QIC does not underwrite the market but focuses on bespoke, innovative and expertise- based transactions we continue to be shielded from a number of major risk scenarios presented by the political and economic environment”.

Overview of key financial results

Figures in USD million 9M 2019 9M 2018
Gross written premiums 2,694 2,623
Net written premiums 2,371 2,263
Net underwriting result* 115 104
Non-life combined ratio 101.5% 102%
Net profit 137 130
Earnings per Share (in USD) 0.036 0.031
Net investment result 168 169
Figures in USD million 9M 2019 9M 2019
Total assets 10,851 10,760
Market capitalization 3,006 3,145
Shareholders’ equity 2,257 2,122

*Net underwriting result is defined as net earned premium reduced by the sum of (i) gross claims paid, (ii) reinsurance recoveries, (iii) movement in outstanding claims, (iv) net commission expense, and (v) other insurance income.

Financial performance

In the first nine months of 2019 QIC Group recorded growth in gross written premiums (GWP) of 3% to USD 2.7 billion, compared to the same period of the previous year.

The Group’s international carriers namely Qatar Re, Antares, QIC Europe Limited (QEL) and its Gibraltar based carriers account for approximately 76% of the Group’s total GWP.

QIC Group’s domestic and MENA operations’ growth remained stable. QIC Insured, the personal insurance division of QIC, continued its growth in digital transformation and innovative products. As a testament to its leading role in driving innovation QIC was conferred the “Best Digital Transformation in Insurance Award” at the inaugural edition of the Enterprise Transformation Summit.

The Group’s net underwriting result improved by 11% to USD 115 million, compared with 104 million for the same period last year. Low-severity high frequency business now accounts for a significant portion of QIC’s total underwriting portfolio.

The underwriting performance during the reporting period was adversely affected by the UK Government’s decision to revise the Ogden discount rate to minus 0.25% on 15th July 2019. The UK Motor insurance and reinsurance business is exposed to impacts caused by the changed discount rates and expected future lump sum settlements of personal injury cases.

QIC Group reported a combined ratio of 101.5% for the first nine months of 2019, an improvement of 0.5 percentage points compared to the previous year. Excluding the impact of reserve developments as a result of changes to the Ogden discount rate in the UK, the underlying combined ratio for the first nine months of 2019 was 99.3%.

Investment income came in at USD 168 million in the first nine months of 2019, compared with USD 169 million in the same period of the previous year. QIC Group’s current investment return amounted to an annualized 4.6%, compared with 4.5% for the same period of 2018. The Group’s investment performance remains unrivalled by any of its peers, based on careful diversification across geographies and asset classes. Regional and global market conditions remained favourable.

Overall, on the back of stable underwriting results and resilient investment income, the Group’s net profit for the first nine months of 2019 increased by 6% at USD 137 million, compared with USD 130 million in the same period last year.

Operational efficiency

During the reporting period, QIC Group further improved its already exceptional operational efficiency. In the first nine months of 2019 the administrative expense ratio for its core operations came in at 6.8%. The Group continues to reap the benefits from its ongoing endeavor towards process efficiencies and automation as well as the integration of back office operations across QIC Group’s international entities.

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