Qatar Insurance Company (QIC) Group has reported 16% year-on-year expansion in gross written premium (GWP) to QR8.97bn in the first nine months of this year.
“Premium income from the countries involved in the political standoff with Qatar does not represent a material portion of the group’s revenues,” a QIC spokesman said.
Despite diplomatic and other economic turbulence in the Middle East, QIC Group’s globally diversified investment portfolio generated net income of QR798mn against QR632mn in the year-ago period.
“The financial results for the first nine months of 2017 demonstrate QIC Group’s resilience under conditions of severe market stress,” according to Khalifa Abdulla Turki al-Subaey, group president and chief executive.
The group’s well-diversified franchise has proven to be able to tackle the challenges of the marketplace, he said, adding the adverse impact of these events would be limited to earnings, with the QIC Group’s strong capital position remaining unscathed, he said.
The group’s shareholders’ equity stood at QR8.17bn at the end of September 2017 against QR8.47bn in the previous year period. In the first quarter of 2017, the group, via Qatar Re, successfully issued Tier 2 capital totalling QR1.64bn. The issue was 14 times oversubscribed.
“In the wake of the third quarter’s natural disasters, our well-capitalised international operations are poised to benefit from the expected upward market revision in reinsurance premium rates,” al-Subaey said.
QIC said 2017 is set to be one of the costliest years on record for global insured natural catastrophe losses. Besides, (re)insurers were hit by adverse legal changes (the Ogden rate adjustment) in the UK in Q1, a continued soft global underwriting environment and politically driven financial markets.
Although net underwriting loss was QR103mn against an underwriting income of QR549mn in January-September 2016, QIC saw QR304mn net profit in the first nine months of 2017 against QR711mn in the year-ago period.
Like the entire global (re)insurance industry, QIC has been impacted by hurricanes Harvey, Irma and Maria (HIM) in the third quarter, the domestic insurer said.
Highlighting that QIC, through Qatar Re and Antares’ Lloyd’s syndicate 1274, had witnessed $174mn losses from these events, it said “these losses are well within QIC’s risk appetite and the expected range for the respective exposures. Their combined impact did not affect QIC Group’s solvency from a regulatory, ratings or internal capital adequacy point of view.”
For QIC Group, HIM is “an earnings event only”, the spokesman said, adding QIC’s relative resilience to HIM testifies the group’s effective risk and exposure management practices, prudent risk selection and state-of-the art internal controls.
The nine-month performance was also materially affected by the UK government’s decision to drastically cut the Ogden discount rate, which shook up the UK motor insurance market, with an expected industry-wide reserving hit of over $10bn.
QIC Group had a major underwriting footprint in the UK and decided to strengthen its motor reserves by $31mn. Further changes to the Ogden rate are under discussion in the UK and could lead to favourable reserve adjustments with a positive bottom-line impact, QIC said.
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