Arig swings to $15m net profit
Manama, February 14, 2013
Arab Insurance Group (Arig), a leading Bahrain insurance company, said it has swung to a net profit of $15.3 million for 2012 from a net loss of $19.1 million in 2011.
In a statement, the company said its reinsurance book and investment income both contributed to the rebound.
The company's technical result for the period was $27 million, compared with a loss of $0.4 million in 2011.
This was based on a combined ratio of 96.9 per cent for the non-life reinsurance portfolio, which was 108.6 per cent in 2011.
Investments yielded $21.4 million in 2012, as against $4 million in 2011, with a return on investible assets at 3.3 per cent in 2012 compared with 0.6 per cent in 2011.
Arig's net profit for the fourth quarter of 2012 alone was $5 million, compared with a net loss of $7.6 million for the fourth quarter of 2011.
The reinsurance firm has also reported a favourable claims experience with an associated drop in non-life loss ratio by 14 points to 57.9 per cent.
Strong earnings were aided by increased profitability in the life book and lower operating cost.
Gross premiums written have reduced by 3.6 per cent to $238.6 million for the year, compared with $247.5 million in 2011.
This was mostly due to the effects of unrest, applied sanction measures and continuing price competition.
"Strict underwriting discipline and a conservative investment strategy has kept Arig away from the pitfalls of uncontrolled growth and declining profitability," chief executive Yassir Albaharna said.
"Arig had a strong rebound in a competitive market place and I believe we are now enjoying the fruits of our past efforts.
"On average, the returns from our reinsurance portfolio have trended upwards even though original market rates continued to slide throughout most of the emerging market," he added.
Shareholders' equity stood at $247.1 million at the end of 2012, as against $222.4 million at the end of 2011, with a book value per share of $1.25 for the period under review.-TradeArabia News Service