MANAMA: Bahrain-based Arab Insurance Group (Arig) delivered consolidated net profits of $18.6 million in 2013 up 6% over $ 17.6 million in 2012.
Arig attributed the results to favourable loss experience, conventional reinsurance operations continued to perform well as the Arig Group Arig, including its corporate member at Lloyd’s, contributed $23 million to profits whereas its subsidiary, Takaful Re, turned in a loss of $4.4 million.
The Group’s net profit for the last three months of the year 2013 was US$ 6 million (Q4 2012: US$ 8.6 million).
Reinsurance operations produced underwriting returns of US$ 13.4 million for the year (2012: US$ 23.7 million), with Arig contributing US$ 18.7 million to this and Takaful Re losing US$ 5.2 million on its Re-Takaful book. The combined ratio was 97.8% for the Group and 94.2% for Arig alone.
The Group’s gross premium reduced by 5% to US$ 262 million during 2013 (2012: US$ 276.5 million), reflecting a 43% reduction in Takaful Re’s portfolio to US$ 21.5 million as the company actively lowered its exposure to the underperforming market sector. Re-Takaful premium represented 8% of the Group’s total gross premium in 2013.
Consolidated Group investment income amounted to US$ 20.4 million for the reporting period (2012: US$ 21.6 million).
“Supported by solid underwriting performance, strong reserves and good investment results, we are pleased with the performance of the Group in 2013,” Yassir Albaharna, CEO of Arig, said.
“Amidst challenging trading conditions, we have seen continuous improvement in the trend of our performance ratios for the conventional reinsurance lines. However, we are equally aware that the Group’s Re-Takaful business remains work in progress as the Takaful industry sector continues to be tested by its underwriting performance. Our tolerance to negative returns affecting the Group is limited.”
“Return on average shareholder funds was 7.7% for the 2013 Financial Year (2012: 7.6%) as shareholders’ equity grew by 6% to US$ 249.2 million at the end of 2013 (2012: US$ 235.2 million). Book value per share reached US$ 1.26 for the same period (2012: US$ 1.19),” Arig in a statement said.
“To comply with new requirements under the IFRS accounting rules, the Group consolidated its Re-Takaful subsidiary participants’ fund into the parent’s 2013 annual accounts. Accordingly, all comparative 2012 figures quoted have been restated,” it added.