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MENAFN - Gulf Times - 27/10/2011

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(MENAFN - Gulf Times) Qatar's listed insurance companies have put up a poor show with the sector's cumulative net profits falling by 0.21% in the first nine months of this year against a 6.37% growth in the previous year period.

The shrinkage in net profitability of the five insurance companies came amidst a by and large growth in net underwriting results, according to the Qatar Exchange data.

The five insurers " which are primarily involved in the non-life segments such as property, casualty, marine, engineering, motor and medical insurance " had also reported 2% rise in premium ceded to re-insurance companies and of which, three have ceded more than 60% of premium to re-insurers. However, the rise in premium ceded is slower than the growth in gross premium.

The listed insurers have made a cumulative net profit of QR700.03mn in January-September this year against QR701.48mn in the year-ago period.
Three of the five listed insurers were on the negative trajectory while two of them witnessed gains in their net profit.

Among them, Qatar Insurance reported a 0.56% net profit fall in the first nine months of 2011 (against 3.24% growth in the year-ago period), Qatar General Insurance and Reinsurance 13.39% (-19.52%), Al Khaleej Takaful Group -12.69% (57.21%), Qatar Islamic Insurance 6.88% (42.01%) and Doha Insurance -5.97% (22.36%).

The cumulative gross premium of all the five insurers was QR3.09bn, which was up 7.62% over that in January-September 2010. Qatar Insurance's was QR1.96bn (9.55%), Qatar General QR0.39bn (-5.23%), Doha Insurance QR0.36bn (15.4%), Al Khaleej QR0.21bn (-3.47%) and Qatar Islamic Insurance QR0.17bn (20.92%).

According to the first financial stability review of the Qatar Central Bank, the insurance market in the country is concentrated, with the largest firm accounting for over 60% of gross premium income and the two largest for nearly 80%.

In the case of premiums ceded to re-insurance companies, Doha Insurance saw a 20.04% increase in the first nine months of 2011, Al Khaleej Takaful (5.66%) and Qatar Insurance (0.30%); while Qatar Islamic Insurance reported 14.01% shrinkage and Qatar General Insurance 6.93%.

Qatar Insurance had ceded 42% of gross premium to re-insurers during January-September 2011 compared to 46% in previous year period, Qatar General 61% (58%), Al Khaleej 63% (61%), Qatar Islamic Insurance 29% (35%) and Doha Insurance 80% (92%).

According to a Qatar Financial Centre Authority survey, which was released during MultaQa in March this year, Qatar displayed the highest cession rate in the GCC (Gulf Co-operation Council), given the high share of large risks in energy, engineering and other commercial lines.

In the case of net underwriting results, Qatar Insurance saw a 22.07% fall to QR274.87mn and Qatar Islamic Insurance by 22.43% to QR13.52mn whereas Qatar General witnessed a 20.94% jump to QR87.55mn, Al Khaleej (surplus from takaful operations) by 37.55% to QR33.19mn and Doha Insurance by 4.06% to QR55.11mn.

Total assets of the insurance companies stood at QR13.55bn with Qatar Insurance reporting QR7.07bn (52.2% of total industry assets), Qatar General QR4.07bn (30.04%), Doha Insurance QR0.95bn (7%), Al Khaleej QR0.84bn (6.22%) and Qatar Islamic Insurance QR0.62bn (4.54%).

In the stock market, the low volume insurance sector, whose stocks mostly come under the micro cap segment, underperformed the Qatar Exchange's benchmark during the third quarter ended September 30, 2011.

Insurance stocks fell 0.63% compared to an overall gain of 0.39% in the 20-stock index and 5.02% in banks, while the indices of industry and services plunged 8.50% and 3.52% respectively at the end of September 30, 2011.


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