Arig sees surge in 2013 net profit
Manama, February 13, 2014
Bahrain-based Arab Insurance Group (Arig) has posted a six per cent rise in its consolidated net profit which hit $18.6 million for last year, when compared to $17.6 million the year before.
Arig, including its corporate member at Lloyd's, contributed $23 million to profits whereas its subsidiary, Takaful Re, turned in a loss of $4.4 million, reported the Gulf Daily News, our sister publication.
The profit growth was assisted by favourable loss experience and conventional reinsurance operations continuing to perform well.
The group's net profit for the last quarter of the year was $6 million, as against $8.6 million in the same quarter of the previous year.
Reinsurance operations produced underwriting returns of $13.4 million for the year (2012: $23.7 million), with Arig contributing $18.7 million to this and Takaful Re losing $5.2 million on its Re-Takaful book.
The combined ratio was 97.8 per cent for the group and 94.2 per cent for Arig alone.
The group's gross premium reduced by 5 per cent to $262 million during the year (2012: $276.5 million), reflecting a 43 per cent reduction in Takaful Re's portfolio to $21.5 million as the company actively lowered its exposure to the underperforming market sector.
Re-Takaful premium represented 8 per cent of the group's total gross premium last year.
Consolidated group investment income amounted to $20.4 million for the reporting period (2012: $21.6 million).
"Supported by solid underwriting performance, strong reserves and good investment results, we are pleased with the performance of the group," Arig chief executive Yassir Albaharna said.
"Amidst challenging trading conditions, we have seen continuous improvement in the trend of our performance ratios for the conventional reinsurance lines.
"However, we are equally aware that the group's Re-Takaful business remains work in progress as the Takaful industry sector continues to be tested by its underwriting performance.
"Our tolerance to negative returns affecting the Group is limited."
Return on average shareholder funds was 7.7 per cent (2012: 7.6 per cent) as shareholders' equity grew by 6 per cent to $249.2 million at the end of last year, (2012: $235.2 million).
Book value per share reached $1.26 for the same period (2012: $1.19).
To comply with new requirements under the IFRS accounting rules, the group consolidated its Re-Takaful subsidiary participants' fund into the parent's annual accounts for last year. Accordingly, all comparative figures for 2012 have been restated.-TradeArabia News Service