Arig's capital base remains strong
Manama, February 15, 2012
Bahrain-based Arab Insurance Group (Arig) said its capital position remains strong despite huge losses seen in the global insurance industry.
The shareholders' equity stands at $222.4 million at the end of 2011 from $260.1 million.
Catastrophe losses, mainly from Asia and Australasia, created the highest claims load the industry has ever recorded from natural disasters in a single year in 2011.
As a fallout, Arig yesterday reported a net loss of $19.1 million for the year against a profit of $20.8 million in 2010.
The net result for the fourth quarter alone was a loss of $7.6m against a profit of $9.2m in the same period in the previous year.
Arig also saw its combined ratio for the non-life portfolio slip to 108.6 per cent from 104.1 per cent.
Losses from earthquakes in Japan, New Zealand and the Thai floods alone pushed up the loss ratio by 10.8 per cent, or $20.5 million.
Contrary to previous years, investment income offered no relief.
With yields from fixed term deposits at historical lows and financial markets under pressure throughout 2011, investment income reduced to $4 million from $24 million last time, representing a return of less than 1 per cent.
Gross premiums written grew by 3.3 per cent overall to $247.5 million for the year from $239.5 million, mainly from new business written through Arig's corporate membership at Lloyd's of London.
"There is no doubt that 2011 was an exceptionally difficult year for most re-insurers world-wide," said Arig chief executive Yassir Albahama.
"The good news is that massive earthquakes have long return periods and apart from these losses, all our key business lines were profitable.
"We are also starting to see an improvement in the trading terms in certain markets, but the investment climate remains challenging.
"We must intensify our efforts to manage cost and efficiencies within our group," he added.-TradeArabia News Service