BKIC achieves BD2.2m at the end of third quarter

The Board of Bahrain Kuwait Insurance Company has approved the financials for the period ended September 30, 2015, at its meeting held on Thursday, November 12, 2015.

The profit for nine months this year amounted to BD2.2 million, compared to BD3.7m in the same period last year. Prior year profit included BD1.5m extraordinary profit from the sale of an investment property.

Murad Ali Murad, Chairman of the Board, mentioned that the results achieved by the company in the current period is satisfactory given the difficult times being faced by the insurance companies in the region. He said that increased competition among insurance companies in the market and consequent low premium rates prevailing in the medical and motor classes is limiting the avenues to increase premium and profitable business.

The underwriting profit decreased by 15 per cent, from BD2.34m in the same period last year to BD2m for the nine months this year mainly due to increase in claims. Income from investment decreased from BD2.1m to BD874,000 due to the extraordinary profit from the sale of investment property booked last year.

He said that the company’s profits in for the three months ended September 30, 2015 decreased by 61pc to BD430,000 compared with BD1.1m for the same period last year due to increase in net claims by BD300,000, increase in premium unexpired risk reserves. Investment impairments also increased by BD247,000 and the Unearned premium reserve increased by BD288,000. BD to KWD exchange rate also affected the results negatively.

Ebrahim Al Rayes, CEO of the Company informed that the gross premium decreased by 5pc to BD26.9m compared to BD28.2m in the same period last year, due to the intense competition among companies in the insurance market, leading to significant reduction premium rates both in the direct insurance and reinsurance markets. Also, unfavourable BD to KWD exchange rate that prevailed during the nine months in this year, significantly impacted the premium booked in Kuwait office.

He said he is hopeful that coming period would be better for the company in terms of production and profitability, as the company is currently negotiating to secure insurance business of few new projects.

It is worth mentioning that BKIC continues to maintain its leadership position in Bahrain market and holds A- (Excellent) credit rating by A.M. Best.