Qatar Insurance Group (QIC) has reported its financial results for the first-nine months of the year, which reveal how the impact of both hurricane Florence and typhoon Jebi in September on its Qatar Re and Antares units pushed the group’s combined ratio above 100%.
QIC, a leading insurer and reinsurer in Qatar and the Middle East and North Africa (MENA) region, has reported net income of $130 million for the first nine months of the year, compared with $85 million a year earlier.
Year-on-year, gross and net premiums written increased to $2.6 billion and $2.3 billion respectively, while its net underwriting result improved to $104 million, compared with a $28 million loss a year earlier.
At the same time, the re/insurer’s non-life combined ratio improved year-on-year from 108.2% to 102%. So, despite strengthening it remained in unprofitable territory. QIC states that the current year combined ratio of 102% reflects Qatar Re’s, its reinsurance arm, and Antares’, its specialist Lloyd’s market re/insurer, share in hurricane Florence and typhoon Jebi, which are expected to drive industry-wide losses of more than $10 billion. Furthermore, QIC notes that Antares was hit by a major marine loss in Germany.
The insurer and reinsurer notes that excluding and prior-year reserve development and as well as natural and man-made cat losses, its combined ratio for the first-nine months of the year was 99.2%.
Year-on-year, investment income for the group declined by 23% in the first nine-months of 2018 to $169 million, which the firm states is mainly a result of certain one-off investment gains booked in the first-half of last year.
Khalifa Abdulla Turki Al Subaey, Group President and Chief Executive Officer (CEO) of QIC Group, said: “The third quarter of 2018 saw a string of major catastrophes losses, especially in the US and Japan. 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, we continue rebuilding our book of business towards low volatility characteristics, focusing on clients who pursue an innovative and analytical approach to product development and underwriting.”
“This transformation process unfolds as we have to deal with challenges beyond our control such as the geopolitical situation in the Middle East and the vagaries of global re/insurance loss and pricing cycles. Therefore, QIC Group is redoubling its efforts to excel in an area which counts among our historical strengths: Cost-efficiency. In that respect, we consider ourselves a forerunner among our global peers some of which have recently embarked on major restructuring plans.”