Qatar Insurance Company (QIC) has reported that its combined ratio exceeded 100% in the first-quarter of 2018 as a result of negative reserve developments on certain older contracts, which pushed down its underwriting result to $32 million.
QIC is one of the leading insurers and reinsurers in Qatar, the Middle East and North Africa (MENA) region, and has reported overall net profit for the first-quarter of 2018 of $63 million, compared with $83 million in Q1 2017.
The firm reports that its combined ratio weakened to 101.6% in Q1 2018 from 99.1% a year earlier, driven by “negative reserve developments on some older contracts in areas of business that are no longer within the company’s risk appetite.”
As a result, its underwriting income in the quarter declined by roughly 35% to $32 million.
QIC states that on a normalized basis, so excluding any prior-year reserve developments, its combined ratio would have actually improved year-on-year, to 98.5%.
The company did write more business in the opening quarter of the year when compared with 2017, reporting gross written premiums of $976 million and net written premiums of $834 million, compared with $849 million and $640 million a year earlier, respectively.
The re/insurer explains that throughout the first-quarter of 2018 it continued key geographical expansion, much of which it attributes to its international carriers, namely Qatar Re, Antares, and QIC Europe Limited, as well as other regional operations.
At the same time, net investment income remained relatively flat, falling by $3 million to end the first-quarter of 2018 at $75 million.
Khalifa Abdulla Turki Al Subaey, Group President and Chief Executive Officer (CEO) of QIC Group, said: “Our growth and underlying technical performance in the first quarter of 2018 demonstrate that QIC is on track to shifting its underwriting focus to lines of business with lower volatility. This shift reflects both our medium-term global industry outlook and a strong commitment to differentiate ourselves through innovative products and services in personal lines.
“The Group’s outlook for the remainder of the year is cautiously optimistic. Political challenges continue while the prospects for a meaningful hardening of global reinsurance and specialty insurance markets remain subdued. Having said this, the agreement we have entered into with Markerstudy earlier this year, will, subject to regulatory approvals, further accelerate QIC’s repositioning in international markets by adding a lower volatility book of U.K. motor insurance business with predictable and long-term profitability.”
