Qatar Insurance Company (QIC), one of the leading insurers in Qatar and the Middle East North Africa (MENA) region announced a net profit of QR 571 million from continuing operations for the first nine months of 2022.
The Group’s gross written premiums amounted to QR 7.8 billion, as QIC’s domestic and MENA operations continued to expand its gross written premiums by 14% to QR 2.3 billion. In line with the strategy to restructure or exit from low-margin or loss-making businesses, QIC Group announced its intention to divest its Gibraltar-based direct insurance carriers.
Mr Khalifa Abdulla Turki Al Subaey, Chairman and Managing Director of QIC Group, said:
"QIC Group continued to deliver healthy results despite strong headwinds from soaring inflation, geo-political uncertainties, high natural catastrophe losses and financial market volatility. In this exceptional environment, our Group further strengthened its leadership position in our home markets. We reduced our exposure to volatile severity risks and laid the foundations to further trim our portfolio and to divest those businesses that no longer fit our lean, yet well-diversified business strategy."
In the first nine months of 2022, a yet unseen combination of major headwinds challenged the insurance industry. Geopolitical tensions, in particular the Russian war on Ukraine, and the outflow from the COVID-19 pandemic continue to drive supply-chain disruptions and energy prices. While the Middle East is expected to experience strong GDP growth in 2022, the mature markets in Europe may well slide into a recession.
Inflation is predicted to reach almost 9% on a global scale, while monetary policies tightened substantially with the US Fed raising its federal fund's rate to 3.25% from 0.5% within just six months, pushing borrowing costs to their highest since 2008.
While rising capital costs will eventually result in higher insurance rates and better returns on a fixed income, in the short-term insurers have to fight exceptional capital market volatility and a decline in fixed-income market values. In addition, inflation will drive the claims ratio for legacy and long-tail risks – a threat that the Group will observe closely. Besides these challenges, insurers still had to battle with mounting natural catastrophe losses estimated at close to USD 100 billion for the first nine months of 2022.
Despite these fierce headwinds, in the first nine months of 2022, QIC Group turned in gross written premiums of QR 7.8 billion. Mr. Salem Khalaf Al Mannai, Group Chief Executive Officer, said
“QIC's domestic insurance business in Qatar and MENA recorded another strong performance in the first nine months of 2022, turning in a solid underwriting profit. Gross written premiums in the region grew by 14% to QR 2.3 billion, compared to QR 2 billion in the first nine months of 2021. Volume growth was mainly driven by strong demand for QIC's market-leading online and digital product offerings and services.”
Source & cover image credit: Press Release
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