Arig posts Q3 loss as global woes bite
Manama, November 14, 2011
Arig, one of the largest Arab-owned, professional reinsurance providers in the region, suffered a loss of $7.4 million in the third quarter compared to a profit of $14.3 million for the same period last year.
Nominal investment returns and lower underwriting income proved insufficient to prevent Arig from increasing its 2011 deficit to an accumulated loss of $11.5 million at the end of the first nine months of the year compared to a profit of $11.5 million last time.
Despite finishing on a combined ratio of 97.2 per cent for the non-life book marginal earnings from investments of only $200,000 compared to $20.5 million meant that little additional income was available to support the company's operations.
Arig has limited exposure to volatile asset classes, but a global decline in share values paired with historically low levels in interest rates kept invested assets mostly flat.
It has been a testing year for the global reinsurance industry so far with insured losses from natural catastrophes estimated at an extraordinary $75 billion at the end of September, with more claims yet expected.
Arig managed to escape the brunt while maintaining a positive technical result of $6.1 million, though the company was moderately affected by losses in Asia Pacific.
Arig, which is listed on Bahrain, Dubai and Kuwait bourses, weathered events in the GCC region and claims related to the Arab Spring unrest.
Meanwhile, lacklustre performance of the regional and most leading economies kept markets' pricing levels low, albeit with some emerging positive trends.
Gross premiums written grew by 15.4 per cent overall to $239 million for the period from $207 million, largely supported by additional business acquirted through Arig's corporate membership at Lloyd's of London and increased cessions from Africa, the Far East and in specialty lines.-TradeArabia News Service