Al Koot puts on hold plan to convert into reinsurance firm

By Santhosh V Perumal

Business Reporter

Al Koot, an insurance subsidiary of the Qatar Exchange-listed Gulf International Services (GIS), has “indefinitely” put on hold the plan to convert it into a reinsurance entity.

“The discussions have been put indefinitely on hold,” a GIS spokesman said in a communiqué to the bourse.

Former finance minister Yousef Hussein Kamal had early this year told Qatar Financial Centre-sponsored Multaqa insurance conference that Al Koot will be converted into re-insurance company and all the insurers will be partners/stakeholders in the new structure.However, the company did not give the reasons. In view of the discussions being put on hold, the GIS spokesman said “no major change is expected in the company structure or in its operation”.

Al Koot was once a captive insurer for Qatar Petroleum and then diversified by providing risk covers to other entities such as Ooredoo.

Market experts had then termed the move to convert Al Koot into a reinsurance entity as “massively positive” as they said it would develop and strengthen the domestic re-insurance capacity because a majority of the underwriting was done abroad.

Al Koot registered gross insurance revenue of QR517.7mn in the first nine months of this year with the main contribution coming from the medical line of business, along with the growth in sums insured and premium inflation in the core energy business. Its profit increased by QR16.3mn or 26.7%, largely in line with the growth in revenue.

The medical line of business is expected to contribute over 45% to segmental revenue by 2017, GIS said in its trading sentiment report released after the third quarter results.

“As part of the insurance segment’s growth plan, Al Koot is actively seeking new opportunities in the market, especially in the medical insurance,” GIS chief co-ordinator Ebrahim al-Mannai had said.

The insurance company has successfully managed to secure several major new clients during this year and in turn has increased the number of medical policyholders.