16th Feb 2006 14:38
Arab Insurance Group (B.S.C.)16 February 2006 16 February 2006 Press Release Arig announces highest ever profit of US$ 48.2 million; cash and stock dividend distribution Manama: Arab Insurance Group (Arig) today announced the highest ever net profitof US$ 48.2 million in 2005, an 82% increase from US$ 26.5 million in theprevious year. The profit for 2005 represents 19.5% return on averageshareholders' equity. At the Board meeting today, the Directors approved the 2005 financial statementsand recommended distribution of dividends to shareholders for 2005. A cashdividend of 5% of paid up capital and bonus share of 1 for every 10 shares heldwill be proposed for approval of the shareholders at the company's annualgeneral meeting to be held on 29 March 2006. In 2005, Arig successfully completed the last of its planned divestments fromthe controlling positions in direct insurance subsidiaries through the sale ofCNIA Assurance, Morocco. Current year's results included capital gains andoperating profits of US$ 28.9 million from this divestment. Keeping in line with its policy to grow the reinsurance business based on thecompany's core competencies, Arig jointly with some leading regional financialinstitutions launched Takaful Re Limited to offer Shari'a compliant reinsuranceservices for Islamic insurance companies. Further, in a move to tap thereinsurance business in the significantly growing Far East markets, Arigestablished a new branch in Singapore. Both Takaful Re and the Arig SingaporeBranch have commenced underwriting operations from 2006. Mr. Khalid Ali Al Bustani, Arig's Chairman said, "We are indeed happy that ourSilver Jubilee year has been capped with an excellent financial performance andsignificant strides in positioning Arig for the future. We are particularlythankful to our reinsurance clients who have maintained long establishedbusiness relationships with us. A clear evidence of their support was ourability to record an impressive 32% growth in premiums despite operating in asoft market environment." Arig's gross premiums from the reinsurance business increased to US$ 173.7million from US$ 131.3 million in 2004. This growth was mainly driven by thetreaty business which contributed US$ 145 million, up from US$ 108.1 million in2004. Premiums from the Asian markets increased substantially by 49% from US$34.9 million in 2004 to US$ 52.0 million in 2005 largely based on the strengthof Arig's 'secure' range investment grade BBB ratings from Standard & Poor's. Mr. Udo Krueger, Chief Executive Officer, Arig, said, "We had a good year on allfronts - whether in terms of underwriting profitability, investment returns orprogressing on initiatives for future growth and profitability. The strategicmeasures that have been resolutely implemented over the last 5 years with thewhole hearted support of the Board have enabled us to register these impressiveresults." During 2005, Arig further improved its market share and overall profitabilitydespite an over-proportional increase in the number of large property claims, asa consequence of which the claims loss ratio increased from 64.2% in 2004 to69.4% in 2005. Arig's investment portfolios, which are conservatively managed to protectpolicyholders' funds, produced increased investment income of US$ 33.0 millionin 2005, up from US$ 20.6 million in 2004. Mr. Krueger added, "With the sale of our subsidiaries, and the consequentreduction of group-wide assets and liabilities, Arig's balance sheet is nowconsiderably leaner. However, we now have a much stronger company with totalshareholders' equity increasing to US$ 272.4 million from US$ 223.1 million atthe end of 2004 and the all time low of US$ 116.7 million just a couple of yearsback at the end of 2002." With the issue of bonus shares, Arig's paid up capital will increase to US$ 220million from US$ 200 million presently. At the end of 2005, the book value ofthe Arig share was US$ 1.38 and its market value was US$ 1.19 per share. Financial Highlights at 31 December 2005 (US$'000) Year Year Year 2005 2004 (proforma) 2004 Gross premiums written 173,652 131,287 131,287 Underwriting result 8,151 25,509 25,509 Investment income 33,042 20,583 20,583 Operating expenses 22,864 21,037 21,037 Profit from continuing operations 19,338 23,769 23,769 Profit from discontinued operations 28,859 2,764 2,764 Net profit 48,197 26,533 26,533 Investment assets 659,426 501,713 1,098,491 Net technical provisions 346,549 330,155 887,640 Shareholders' equity 272,383 223,103 223,103 Total assets 902,228 773,692 1,608,310 Book value per share (US$) 1.38 1.13 1.13 Proforma information is presented to show the 2004 figures excluding assets andliabilities of the subsidiary sold in 2005. Mr Khaild Ali Al Bustani, Chairman, Arab Insurance Group (Arig) (seated second from left) addressing the Media. Alsoseen in the picture (From Left to Right) Mr Yassir Albaharna, GM, Reinsurance, Arig, Mr. Udo Krueger, CEO, Arig and Mr.Mathews John, Director Finance & Investments, Arig. ***************** For further information or enquiries, please contact Deepak Kanulkar Head of Corporate Communications on Tel: +973 17 544 321, Fax: +973 17 531155, Mobile: +9733933 9263. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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