Qatar Insurance Company (QIC), the insurance group that owns Qatar Re and Antares, announced what it described as solid growth in the first quarter of 2017.
However, QIC’s profits dipped on the back of a lower net underwriting result hit by changes to the UK’s Ogden discount rate, which is used to determine personal injury compensation awards.
QIC’s gross written premiums came to $849 million in the first quarter, an increase of 15 percent. The company said the contributors to growth were Qatar Re and Antares, in addition to its Life and Medical insurance subsidiary, QLM, headquartered in Doha, Qatar.
The group’s international subsidiaries in Bermuda, London and Malta now account for approximately 69 percent of QIC’s total GWP.
QIC’s net profit dipped to $85 million compared with $90 million in the same period a year earlier largely because of a lower net underwriting result of $49 million compared with $76 million the year before.
It said this was largely as a result of a change in the Ogden discount rate that was announced in March this year by the Justice Secretary in the UK. The discount rate related to lump-sum personal injury compensation was cut from 2.5 percent to -0.75 percent.
“This had a significant negative impact on the motor insurance business in the United Kingdom with expected losses to the insurance market of about £7 billion. Qatar Re, QIC’s global reinsurance subsidiary, has recognised the Ogden impact in Q1 2017, reducing its underwriting income by about $31 million,” the company said.
This was offset, however, by an improvement in its investment result which reached $83 million, compared with $55 million a year earlier. Its combined ratio increased to 99 percent compared with 92 percent the year before.
Khalifa Abdulla Turki Al Subaey, group president & CEO, said: “The results for Q1 2017 highlight the Group’s sound risk management principles and its constant endeavour at exploiting profitable growth opportunities. We will continue to increase our book of business, build on our capabilities and expand our reach in order to introduce innovative products and services in the target markets.
“The Group’s outlook for the future remains cautiously optimistic. Our long term goal remains to seize market opportunities as they arise whilst focusing on maintaining close proximity with our clients and adapting to a rapidly changing environment.”
QIC, Qatar Re, Antares, Qatar Insurance Company, Results, Reinsurance, Bermuda, MENA