Arig upbeat on insurance profit growth

Manama, March 26, 2012

Bahrain-based Arab Insurance Group (Arig) said positive stock markets have given a solid start to the year but slowing economic growth, sluggish demand in insurance classes and a low interest rate will continue to challenge shareholders' expectations.

'From and investment income point of view, we have started well as markets have been picking up,' said chief executive Yassir Albaharna after the company's annual meeting at its head office in Manama yesterday.

'But markets remain volatile, so it is early to predict investment income for the year. Last year was a bad year for everyone in the reinsurance business because of a number of natural disasters,' he noted.

'So far this year, we have had local problems with flooding in Saudi Arabia and flooding and earthquakes in New Zealand and Thailand,' Albaharna stated

Shareholders at the meeting agreed to a proposal that Arig should de-list from the Kuwait stock market.

'There is very limited value in being quoted there because there are very few trades and the cost of being listed outweighs the benefits,' he said. The company shares trade on the Bahrain Bourse and in Dubai.

'Slowing growth throughout the world economy, sluggish demand in most insurance classes and a low interest rate environment will continue to challenge shareholders' expectations in 2012,' said chairman Khalid Ali Albustani.

'As Deloitte's worded it in its 2012 Global Insurance Outlook, generating growth in a challenging economy takes operational excellence and innovation. In our own terms, this translates into tightening of group efficiencies and the realisation of opportunistic benefits as they may offer themselves.

'The board feels compelled to look at innovative and alternative ways so that the Arig Group is placed in a better position of manoeuvring a successful course through a difficult period. We realise that standstill is not an option.'

'The industry has taken a hit in 2011 and Arig was no exception, however, there is at least one new opportunity in every crisis,' he added.-TradeArabia News Service

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