Qatar Insurance Company (QIC), the leading insurer in Qatar and the Middle East North Africa (Mena) region, has reported a 181% year-on-year increase in net profit to QR325mn for the first half (H1) of 2023.
“QIC’s bottom-line results demonstrate the success with which the company has navigated a challenging macroeconomic environment in H1-2023," said Sheikh Hamad bin Faisal al-Thani, chairman of QIC Group.
In addition to broad increases in net profitability, he said the group has seen double digit growth in its core Mena business activities. The group's gross written premiums (GWP) amounted to QR5.5bn with domestic and Mena GWP rising 14% in H1-2023.
The macroeconomic and geopolitical landscapes have remained challenging in H1-2023 but show recent signs of improvement, QIC said, adding interest rate hikes have slowed as inflationary trajectories ease, global labour markets have begun to normalise, and global shipping costs have decreased to reach almost pre-pandemic levels.
Insurance markets also continued to harden in select lines of business. However, inflation in the UK and the effects of Brexit has had some effect on the UK motor insurance market.
The group’s international operations, Antares Global – which includes the brands Antares Re, Antares Lloyds Syndicate and QIC Europe Ltd – has performed exceptionally well, delivering a premium volume of QR3.6bn, amid rate hardening and tightening market conditions.
Insurance service results were valued at QR552mn in H1-2023 compared to QR32mn the year-ago period and net investment results amounted to QR460mn during H1-2023 against QR475mn the previous year period.
Global financial markets faced significant headwinds in H1-2023 – including volatility due to concerns over the global banking crisis – while government bond markets have moved from pricing in rate hikes to discounting sizeable rate cuts in some markets.
Inflation is persistent – though slowing – in mature markets, meaning that interest rate hikes by central banks have continued, albeit at a gentler pace. Despite this volatile market environment, QIC reported net investment results of QR460mn for H1-2023 compared to QR475mn for H1-2022. The annualised return on investment stood at 5.4% against 4.8% the previous year.
Though market challenges persist due to inflation and geopolitical unrest, the company has taken decisive steps to minimise its exposure to high severity and volatile international risks, Sheikh Hamad said.
"We’re proud of QIC's distinguishing brand attributes, including its exceptional digital capabilities and operational efficiency. As we look forward to the rest of the year, we are committed to providing market-leading levels of customer service and innovative, reliable insurance products across the Middle East, Europe, and international insurance markets,” he said.
Salem Khalaf al-Mannai, Group chief executive officer, said throughout H1-2023, QIC has maintained its strategic focus on expanding its primary insurance business, mainly the profitable direct-line insurance markets throughout the GCC or Gulf Co-operation Council.
“Meanwhile, the company has mitigated risks by exiting high severity, low margin, and loss-making international markets. This strategy’s success has been demonstrated by 14% growth in domestic and Mena operations' GWP to QR1.9bn in H1-2023 compared to QR1.7bn for the same period in 2022," he said.
As the group looks ahead to the rest of the year and beyond, QIC remains committed to growing its direct insurance vertical in the region, he said, adding QIC’s operating priorities have underpinned the strength of its performance.
"By focusing on process efficiencies and automation, the company has further improved its already outstanding operational efficiency in H1-2023," according to him.
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