Qatar Re parent QIC profits up reflecting portfolio shift to lower volatility
Qatar Insurance Company Group (QIC), the insurance group that owns Bermuda-based Qatar Re, had a profitable 2018 following its strategic decision to shift the underwriting focus to a lower volatility segment against costly catastrophe years.
QIC's net profit for the full-year was $182 million, up from $116 million for 2017.
Gross written premiums grew 8 percent to $3.5 billion, up from $3.2 billion in 2017.
QIC attributed around three quarters of its revenues to outside the MENA region. Its international carriers - namely Antares, Qatar Re, QIC Europe and Markerstudy posted GWP growth of 11 percent to $2.7 billion.
The group's combined ratio improved 4.5 percentage points to 101.3 percent.
QIC suggested the combined ratio reflected Qatar Re’s and Antares’ share in a number of hurricanes and typhoons as well as the unprecedented California wildfires later in the year. Furthermore, Antares was impacted by a major marine loss in Germany (Lürssen shipyard).
“For the global insurance industry, 2017 and 2018 were the costliest back-to-back years on record. Insurers and reinsurers had to digest catastrophe losses close to $230 billion," said Khalifa Abdulla Turki Al Subaey, group president and CEO of QIC Group.
"Still, rate increases remain elusive as the growth of alternative capital with lower return hurdles places secular and not just cyclical pressure on re/insurance margins in the low frequency high severity space. Against this backdrop, our strategic decision, taken more than a year ago, to shift the underwriting focus to a lower volatility segment has proven right.”
He continued: “This comprehensive de-risking was successfully completed towards the end of 2018 and we should be able to reap the fruit of this effort in 2019 and beyond. At the same time, as Qatar’s dominant insurer and a leading regional operator and investor, our Group is set to benefit from Qatar’s impressive recovery from the economic blockade that was imposed on the nation by some of its neighbouring countries in June 2017. For these reasons, we are cautiously optimistic for the remainder of the year even though global economic and industry uncertainties continue to loom large.”