BKIC records net profit of $7.2m

22/02/2016 07:57 AST

Bahrain Kuwait Insurance Company (BKIC) yesterday reported a net profit of BD2.7 million ($7.2m) for last year as against BD4.2m in 2014.

A statement by the firm said the decrease was mainly due to a drop in net investment income from BD2.2m in 2014 to BD1.1m in 2015.

In 2014, there was profit of BD1.5m on sale of investment property. Also last year, said the firm, there were new expenditures like contribution to the newly established Hit & Run Fund, amounting to BD112,000 (for 27 months from October 2013) and a provision of BD145,000 towards Zakat in Kuwait office in accordance with the regulations of the country.

The profit reduced by BD57,000 due to Kuwaiti Dinar/Bahraini Dinar (KD/BD) exchange rate. The additional impairment during the year for investment was BD304,000.

At the end of last year, a loss of BD386,000 was booked towards share of losses in a strategic investment as per their management accounts.

However, underwriting profits increased by almost 2.4 per cent from BD2.96m in 2014 to BD3.03m last year.

Shareholders equity decreased from BD35m in 2014 to BD34.2m in 2015 on account of decrease in currency translation reserve due to unfavourable KD/BD exchange rate.

Investments fair value reserve also decreased to reflect changes in market values of the investments. The return on equity was 7.92pc (12.11pc in 2014) and earnings per share were 38 fils against 59 fils in 2014.

The company’s board of directors has proposed a cash dividend of 30pc on the paid-up capital of BD7.15m, equivalent to 30 fils per share. The board said the results were satisfactory, given the difficult situation prevailing in the region due to low oil prices and also due to severe competition in prices among insurance companies particularly in motor and medical insurance lines.

According to chief executive Ebrahim Al Rayes, gross written premium decreased by 4pc from BD39.8m in 2014 to BD38.1m last year due mainly to decrease in premium in medical class caused by non-renewal of some major accounts.

“However, this reflected positively on the technical results to record an increase of 2.4pc in insurance profits,” he added.

“Additionally, conditions and premium rates prevailing in reinsurance market created severe competition among insurance companies in writing large risks which represent a large portion of our insurance portfolio.

“This had the effect of reducing the premium of some of our large accounts.” Mr Al Rayes said he was hopeful that better results will be achieved during the year “despite the competition in insurance market, given the company’s leadership position and reputation in Bahrain and Kuwait markets”.

Gulf Daily News