The UK Government’s revision of the Ogden discount rate to -0.25% adversely impacted Qatar Insurance Group’s (QIC Group) underwriting performance in the first nine months of 2019, driving its combined ratio above 100%.
At 101.5%, QIC Group’s combined ratio for the period improved slightly from the 102% recorded for the same period in 2018, with the company reporting an underwriting result of USD 115 million for 9M 2019, compared with USD 104 million a year earlier.
Excluding the impact of reserve development driven by a change in the Ogden rate, and QIC Group’s underlying combined ratio for the first nine months of 2019 was 99.3%. The re/insurer notes that low-severity, high frequency business now makes up a significant portion of its total underwriting portfolio, part of an ongoing strategic shift at the firm.
Net profit increased slightly year-on-year to USD 137 million, compared with USD 130 million in 9M 2018. At USD 168 million, QIC Group’s net investment result remained stable in the period.
Gross written premiums (GWP) jumped by 3% in the period to USD 2.7 billion, while net written premiums also increased in the first nine months of the year, to USD 2.4 billion.
QIC Group explains that its international carriers, namely Qatar Re, Antares, QIC Europe Limited (QEL), and its Gibraltar based carriers account for around 76% of its total GWP.
Khalifa Abdulla Turki Al Subaey, Group President and Chief Executive Officer (CEO) of QIC Group, commented: “We continue to execute on our strategic shift towards lower volatility segments of the international markets. QIC’s stable underwriting profitability testifies to the attractive economics of this business, with relatively stable and predictable margins.
“The Group’s near-term outlook remains cautiously optimistic. Our exposure to the geopolitical situation in the Middle East and the vagaries of global re/insurance pricing is relatively moderate. As QIC does not underwrite the market but focuses on bespoke, innovative and expertise- based transactions we continue to be shielded from a number of major risk scenarios presented by the political and economic environment.”
