MANAMA, Bahrain, Feb. 15, 2007 (PRIME NEWSWIRE) -- Arab Insurance Group (Arig) has shown another year of strong performance. The company announced a net profit of US$30.4 million for its 2006 Financial Year (2005: US$48.2 million). Despite ending below the previous year's result, performance in 2006 has in fact exceeded that of 2005 if extraordinary items of US$10.4 million in 2006 and US$28.9 million in 2005 are ignored.
Consequently, Arig's Board of Directors has recommended a cash dividend of 10% on the company's paid-up capital or 10 cents per share. The dividend remains subject to clearance by the Central Bank of Bahrain and approval at the company's Annual General Meeting to be held on 29th March 2007.
Arig managed to further improve on its underwriting results and associated costs from reinsurance, in spite of a softening in the terms of trade that impacted the international reinsurance industry. The company was also able to isolate itself from the downward turn in the regional equity markets. Having reaped the benefits of its conservative investment policy and a positive performance in the global markets, investment earnings increased to US$38.4 million (2005: US$33.2 million).
Stricter underwriting discipline and portfolio screening resulted in a 4.2% reduction in Gross Premium Written, which is now reported at US$166.3 million (2005: US$173.7 million). But its profitability driven approach leaves the company less concerned about absolute volume growth, especially as it has been developing new attractive business fields, which are expected to make a positive contribution to future years' results. Arig's Singapore Branch managed to expand premium income from Far East markets by 54.7% year-on-year, while the Group's Islamic Takaful Re subsidiary firmly established itself with Gross Premium Written of US$15 million in 2006, contributing US$2.2 million to the Group result in its first year of operations.
In consolidation of the company's new management team led by CEO Yassir Albaharna, the Board appointed Andreas Weidlich to the position of General Manager - Reinsurance with effect from 1st January 2007. He has been overseeing Arig's combined reinsurance interests since joining the company in April last year.
Financial Highlights as at 31 December 2006
(US$'000)
Year Year
2006 2005
---- ----
Gross premiums written 166,304 173,652
Underwriting result 8,066 8,291
Investment income 38,377 33,182
Operating expenses 24,188 22,864
Profit from continuing
operations 30,366 19,338
Profit from discontinued
operations -- 28,859
Net profit 30,366 48,197
Investment assets 674,274 659,426
Net technical provisions 361,219 346,549
Shareholders' equity 293,396 272,383
Total assets 930,176 905,142
Book value per share (US$) 1.36 1.26
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