Qatar Re and Antares boost QIC growth as they target low volatility classes

Qatar Insurance (QIC) Group, which owns Qatar Re and Antares, posted improved profits for the first nine months of the year and solid growth driven by its reinsurance business. The company also detailed how, in response to soft pricing and other headwinds, it is repositioning its international operations towards low volatility classes whilst shedding under-priced (severity) business.

QIC made a net profit of $130 million for the first nine months of 2018, an increase of 54 percent compared with the $85 million it recorded in the same period last year. Its combined ratio for the period was 102 percent, an improvement on the 108.2 percent it posted a year earlier but still hit by catastrophe losses, especially in the third quarter. Notably, this figure included Qatar Re’s and Antares’ share in hurricane Florence and Typhoon Jebi in September. In addition, Antares was impacted by a major marine loss in Germany (Lürssen shipyard).

Qatar Insurance’s gross written premiums increased by 6 percent to $2.6 billion compared with a year earlier. Much of this growth was driven by the group’s international carriers: Qatar Re, Antares and QIC Europe (QEL), which posted a combined GWP growth of 11 percent.

QIC Group ’s domestic and MENA operations growth remained stable, while the company’s life and medical insurance subsidiary, QLM, headquartered in Doha, and OQIC, the group’s listed subsidiary in Oman, continued to expand.

The company also noted that further impetus for growth arose from the ongoing digitalization of the Group’s MENA retail pillar. QIC Group’s international subsidiaries in Bermuda, the UK and Malta accounted for approximately 76 percent of the Group’s total GWP.

Khalifa Abdulla Turki Al Subaey, group president & CEO of QIC Group, said: “The third quarter of 2018 saw a string of major catastrophes losses, especially in the US and Japan. Still, rate increases remain elusive as the growth of alternative capital with lower return hurdles places secular and not just cyclical pressure on re/insurance margins in the low frequency high severity space.

“Against this backdrop, we continue rebuilding our book of business towards low volatility characteristics, focusing on clients who pursue an innovative and analytical approach to product development and underwriting.

“This transformation process unfolds as we have to deal with challenges beyond our control such as the geopolitical situation in the Middle East and the vagaries of global re/insurance loss and pricing cycles. Therefore, QIC Group is redoubling its efforts to excel in an area which counts among our historical strengths: cost-efficiency. In that respect, we consider ourselves a forerunner among our global peers some of which have recently embarked on major restructuring plans.”

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