Abu Dhabi, 18 February, 2013 - Insurance House P.S.C (IH) has registered a net profit of AED 7.54 million during the first financial reporting period since date of commencement of operations, compared to a projected loss of AED 7.46 million at the end of the first full year of operations as per the IPO Prospectus. This is a remarkable achievement for a start-up enterprise in the UAE insurance sector, and that too, in the very first year of operations.
Gross Premiums Written (GPW) during this maiden reporting period totaled AED 78.4 million, whilst Net Earned Premiums aggregated to AED 42.9 million, accounting for a robust 54.8% of GPW. Net Underwriting Profit after deducting Operating expenses was AED 8.5 million, which equates to 10.8% of GPW. Underwriting Profit from core insurance business was complemented by robust and sustainable income generated from a diversified and professionally managed proprietary investment portfolio.
Income from investing activities during the reporting period amounted to AED 23.5 million. Total Assets grew by a whopping 140% to AED 302.6 million as of 31 December 2012 compared to AED 125.8 million as of 11 April 2011. During the same period, Total Shareholders’ Equity strengthened to AED 126.7 million as of 31 December 2012, compared to AED 119.9 million as of 11 April 2011. This is comfortably above the minimum required capital of AED 100 million mandated by the UAE Insurance Authority.
The Company maintains a conservative approach to liquidity management. Cash and cash equivalents as at 31 December 2012 stood at AED 17.2 million and a further AED 86.5 million was placed in short term fixed deposits with reputed commercial banks in the UAE. The combined liquid assets aggregating to AED 103.7 million accounted for over 34% of Total Assets as of 31 December 2012.
Commenting on Insurance House’s results, Mohammed Abdulla Alqubaisi, Chairman of Insurance House said: “Since inception, Insurance House has crossed several major milestones at a rapid pace- first successful post-financial crisis IPO in the UAE, operating break-even in less than 12 months from commencement of operations, impressive list of Class A clients, an attractive bouquet of tailor-made insurance solutions and rapid expansion of branch network. All of these are remarkable achievements for a start-up company, bearing in mind the challenging business growth conditions experienced by the UAE insurance industry as a whole”. According to Mohammed Othman, General Manager: “Operationally, Insurance House is fully equipped with state-of-the-art IT Systems, well documented operating policies & procedures, underwriting, claims handling & settlement processes.
We have been able to attract to our ranks, top caliber insurance professionals with extensive experience in the UAE market”. Insurance House operating cost model is designed to be efficient and rapidly scalable in line with business growth. General & administrative expenses for the reporting period (covering nearly 21 months) amounted to AED 24.4 million, which is very reasonable for a full-fledged insurance operation covering our Abu Dhabi headquarters and 3 operational branches located in Dubai, Sharjah and Al Samha. “More than 14% of the Company’s current workforce comprises of UAE nationals, manifesting our strong commitment to the development of UAE nationals in the insurance sector. This is well ahead of the minimum requirement for employment of UAE nationals currently mandated by the UAE Insurance Authority.
In recognition of our commitment and ongoing efforts to develop UAE nationals in the insurance sector, the Company was awarded by the Insurance Authority in November 2012”, added Othman. Bearing in mind the need to invest for accelerated growth in the near term, the Board does not recommend any dividend payment. However, the Board has decided to initiate a Share Buyback Program for up to 10% of the Company’s shares, subject to regulatory approvals. “We believe that there is no better investment we can make than in our own future. The share buyback initiative is in the best interests of our shareholders and the Company and is intended to enhance shareholders’ value”, concluded Alqubaisi.