Arig posts $4m H1 loss on provisions
Manama, August 12, 2011
Bahrain-based re-insurance group Arig suffered a first half net loss of $4.1 million against a loss of $2.8 million for the first six months of last year.
That was largely driven by provisions taken against reported and unreported Middle East and North African riot claims and by under-performing financial markets.
Arig's exposure to natural catastrophe losses remained at the expected moderate level. The company's combined ratio stood at 96.3 per cent at the half-year mark compared with 98.5pc.
The net result for the second quarter was a loss of $4.8 million, down on the $7.3 million in the second quarter of last year.
Gross premiums written by the group increased by 6.7pc to $188.9 million compared with $177.1 million last time.
Following a review of the latest developments, Arig decided to increase its reserves for riot claims arising from the events of the Arab Spring in several of its Middle East and North Africa markets.
"While we believe that many of the claims seen from the peoples' revolutions in North Africa would fall under common policy exclusions, we are faced with government decrees, intense client pressure and a judiciary that may feel sympathetic to the national cause," said Arig chief executive officer Yassir Albaharna.
"Going forward we will need to decide if strike, riot or civil commotion in its current form will be an uninsurable peril in some of our markets," he added.
Investment produced net income of $8.8 million, up from $5.5 million but fell short of expectation as European and US debt crisis and slow demand in key regions depressed earnings.
Book value per share registered at $1.23 compared with $1.31 at the year-end. - TradeArabia News Service