Qatar Re records 2016 profits, but withdraws from unprofitable lines
Bermuda-based Qatar Re saw profits for full year 2016 grow by more than fifty percent, after it withdrew from underpriced business to focus on more lucrative areas of the market.
The company said that net income grew from $25 million in 2015 to $38 million in 2016, a rise of 52 percent. Gross written premiums also rose, going from $1.16 billion in 2015 to $1.25 billion in 2016, a rise of 8 percent.
“In 2016, our focus was on consolidating Qatar Re’s book of business in what has been a continuously degrading market environment,” said Gunther Saacke, CEO of Qatar Re. “In line with our expectations, the pace of our premium growth has slowed as we focus on maintaining price adequacy. Whilst it has been necessary to withdraw from certain underpriced business, we were successful in replacing it with more attractive risks, primarily emanating from highly specialist reinsurance transactions and bespoke support of insurance entrepreneurs.
“Qatar Re is not a market tracking reinsurer, meaning that we are well placed to weather the effects of irrational price competition, supported by our growing and globally diversified multi-line franchise.”
As a result of this withdrawal Qatar Re said that it has reduced its participation in several lines of treaty business, including marine and energy, non-US property catastrophe, and Middle East property and casualty.
In contrast, Qatar Re increased its participation in UK motor structured deals, international property facultative, and US property per risk. In a statement the company said that these lines of business “continue to demonstrate attractive returns. Certain new specialist lines of business, such as residual value insurance and US casualty, are also expected to contribute to the Company’s future growth, albeit at modest levels.”
However, Qatar Re also saw its combined ratio weaken, rising from 93.8 percent in 2015 to 98.2 percent in 2016. The company said that its loss ratio on its net earned premiums increased from 67.6 percent in 2015 to 72.9 percent and that 2016 had seen an ‘unusually high frequency of large man-made losses’, as well as sizeable catastrophe losses such as Hurricane Matthew and earthquake activity in New Zealand.