Tribune News Network
Doha
Qatar Insurance Company (QIC), the leading insurer in Qatar and the Middle East and North Africa (MENA) region, has reported a net profit of QAR 360 million for the first half of 2024, rising 11% from QAR 325 million over the same period in 2023.
Sheikh Hamad bin Faisal Al Thani, Chairman of QIC Group, stated: "QIC’s excellent H1 financial results reflect the strong momentum the company has built in the first six months of 2024. The Group is focused primarily on growing its presence in domestic and regional markets – an approach which has been bolstered by continued investment in its already best-in-class digital services.”
Salem Al Mannai, Chief Executive Officer of QIC Group, said: "In a very promising set of results for H1 2024, the backbone of QIC’s robust financial performance continues to be the company’s exceptional operational efficiency, supplemented by a deliberate shift towards increasing the proportion of premiums generated in the MENA region. This is reflected in the fact that the domestic and MENA GWP increased by 44% year-on-year to QAR 2.7 billion. As we move into the second half of the year, QIC is proactively pursuing further opportunities to create process efficiencies and foster automation, while continuing to prioritise growth in its profitable business lines in Qatar and the Middle East.”
Mannai added: "The strategic restructuring of our UK motor business is in line with QIC Group’s strategy to streamline loss-making and low margin businesses and to bring the international operations of the Group back to profitability. This restructuring positions the Group for greater stability and profitability with controlled exposure to UK Motor as a reinsurer instead of direct insurer. As part of this decision, QIC Group will continue to own the Gibraltar-based subsidiaries, West Bay Insurance Plc and Markerstudy Insurance Co. Ltd. By successfully completing this restructuring, the Group is confident that it will have a well balanced portfolio between its MENA and international business. We are pleased with the outcome, and we look forward to further implementing our strategy, which has, so far, brought us significant success and improved consistent profitability.”
Mannai further added: "Looking beyond these financial results, everyone at QIC can be tremendously proud of what we have achieved in the first half of this year. The company has once again won several respected industry awards – including being named ‘Insurer of The Year in Qatar’ at The MENA IR Awards for the third year in a row and gaining widespread recognition for its exceptional digital services. We have brought together the leading experts in the region’s insurance sector to analyse and explore one of its most significant trends: the increasing prevalence and utility of AI. We have also supported a number of extremely worthy initiatives, from children’s early education in insurance matters to grassroots and professional sporting events”.
The global macroeconomic environment showed some signs of stabilisation in the first half of 2024, particularly as inflation receded across much of the world.
While the catastrophic events in the first half of 2024 continued to impact global insurance markets, QIC with its now balanced portfolio mix has been able to successfully weather the challenges. During the first half of 2024, UAE witnessed multiple floods, highlighting the increasing frequency and severity of extreme weather events, leading to multi-billion dollar insured motor and property losses that were largely absorbed by the international reinsurance industry. The recent catastrophic losses in the region, may lead to market rate hardening, as insurers and reinsurers adjust their pricing to account for the heightened risk. Meanwhile, in the US city of Baltimore, the collapse of the Francis Scott Key Bridge led to what was considered one of the largest single marine insurance losses ever – ultimately amounting to $4 billion, according to some estimates.
Prioritising growth in domestic and regional insurance markets
With global macroeconomic conditions potentially improving but still uncertain, and geopolitical risk remaining high, QIC has been steadfast in its longer-term strategy of focusing on profitable markets in Qatar and the MENA region, while exiting loss making and low margin international businesses. This is showcased by the increase in GWP from its domestic and MENA operations by 44% in H1 2024, compared to the same period last year. QIC currently has a balanced and well diversified portfolio with 57% of its insurance business written by the MENA entities and 43% of business underwritten by the international operations.
With regards to its lines of business, QIC has recently focused on growing its personal lines and health insurance divisions, as well as marine & energy insurance. While the company’s exposure to the international motor insurance market has been intentionally reduced – particularly in the UK, as a result of supply chain challenges largely induced by Brexit – it continues to prioritise its award-winning motor insurance business in the MENA region. More broadly, QIC’s international insurance operations, which have been successfully slimmed down over the past few years, are exhibiting healthy combined ratios.
The Group posted Insurance Service Results of QAR 339 million in H1 2024, compared to QAR 236 million in H1 2023.
QIC has shown considerable resilience to navigate the aforementioned global challenges, reporting an investment income of QAR 465 million for H1 2024, compared to QAR 501 million for the same period last year. The return on investment stood at 5%.
As of the end of H1 2024, the composition of QIC’s investment portfolio continues to remain stable and consistent with the previous year.