QIC’s ‘lead position’ in its domestic online personal lines business ‘paid off well’ as customers transacted through to the company’s digital platform.
Qatar Insurance Company (QIC) has seen its gross written premiums grow by 4% to QR10.2bn in the first nine months of 2020, primarily driven by hardening of rates in commercial insurance and reinsurance.
The leading insurer in the Middle East North African (MENA) region announced its financial results for the first nine months of this year, following a meeting presided over by Sheikh Khalid bin Mohamed bin Ali al-Thani, QIC chairman and managing director.
QIC’s “lead position” in its domestic online personal lines business “paid off well” as customers transacted through to the company’s digital platform.
QIC’s financial results for the reporting period were adversely affected by the effects of Covid-19 pandemic on global economies and financial markets.
Despite the prevailing headwinds, QIC’s year-on-year premium growth to QR10.2bn is attributable to the hardening of premium rates in the commercial insurance market and the continued expansion of its domestic online business, which delivered “stable” returns.
QIC’s international carriers “successfully” continued their acknowledged strategy to expand in select low volatile lines of business while moderating their exposure in high severity classes. Today, QIC’s international business accounts for approximately 75% of the Group’s well diversified domestic and international book of business.
Alongside these developments, QIC’s domestic and MENA operations continued to drive forward the digitisation of its personal lines business, cementing its position as a leader in the regional markets.
In fact, during the lockdown, QIC’s personal insurance division - QIC Insured and QIC’s life and medical insurance subsidiary, QLM Life & Medical Insurance Company (QLM) were able to capitalise on its highly sophisticated digital distribution, client management and operational platform, generating “stable” volume growth whilst delivering robust returns.
However, the underwriting performance of QIC Global, namely, Qatar Re, Antares, QIC Europe Limited, and the Gibraltar-based insurance companies, was “negatively” impacted by Covid-19 and the lockdown in key economies.
For the first nine months of 2020, the Group’s net underwriting loss stood at QR83mn.
Despite the exceptional volatility in global financial markets, QIC’s investment portfolio performed reasonably well. Following the pandemic outbreak, global central banks and governments took unprecedented measures like sharply cutting interest rates, extending or relaunching quantitative easing programs, providing incentives or subsidies to prop up the economic activity, etc. to mitigate the impact of the pandemic on real economy.
The pandemic as well as the central bank and government actions that followed had a significant impact on asset values, impacting the insurers’ investment portfolios. Q1 and first half of Q2, 2020 saw the portfolio values drop significantly, followed by a recovery of asset values in Q3 2020.
“While the global equity markets recovered significantly, the regional equity markets remained a laggard due to lower oil prices. Whereas, lower interest rates and tightening of credit markets allowed the bond portfolios to recover most of the losses. Against this backdrop, QIC achieved a net investment income of QR454mn during the nine months of 2020.”
During the reporting period, QIC’s continued endeavour towards process efficiency and automation resulted in further improvement of its already exceptionally low administrative expense ratio for its core operations of 6% for the first nine months of 2020 as compared to 6.4% during 9M 2019.
Overall, the consolidated net loss of the Group for the nine months of 2020 came in at QR131mn.
QLM Life and Medical Insurance Company, QIC’s Life & Medical business has further expanded its global medical network. By the end of the third quarter 2020, its network includes 75,000 medical facilities, such as hospitals, clinics, diagnostic centres and pharmacies in 103 countries across six continents.
Its broad network of facilities enables QLM to provide its policyholders with a pallet of comprehensive medical in and out-patient services that is almost unrivalled in the region and puts QLM in a strong position for robust future premium and earnings growth.
QIC, based on its diversified business profile, its focus on personal and select commercial lines and its digitally transformed business model is well placed to strengthen its market position and further thrive in the post-Covid environment.
Earlier this year, QIC Group successfully issued $300mn perpetual non-call 5.5 year subordinated Tier 2 capital notes. While offering excellent security to policyholders, the new issuance further strengthened the Group’s robust capital position and reinforced its efficient capital structure.
Despite the volatility in international debt capital markets, the interest from investors in the perpetual notes issuance was outstanding and demonstrated the continued confidence of investors in QIC Group.
QIC’s Group President, Khalifa Abdulla Turki al- Subaey noted, “QIC Group benefits from its very strong and robust risk-based capital adequacy in combination with the scale and diversification of our business portfolio. We are encouraged by the resilience that QIC Group has demonstrated in these unprecedented times.
“While consumers and businesses in major economies were in lockdown, we continued to generate strong organic growth originating from our online personal insurance business in the MENA region, a clear testimony to the strength and goodwill of the QIC brand and the trust and confidence customers place in the Group. The growth was further benefited from the hardening of commercial rates.”