Qatar Reinsurance Company confident it can build on growth from first half of 2016

Gunther Saacke, Qatar Re's chief executive officer
Gunther Saacke, Qatar Re's chief executive officer

Despite challenging conditions in global financial markets, Qatar Reinsurance Company LLC (Qatar Re), the reinsurance arm of Qatar Insurance Company (QIC), achieved improved profitability in the first half of 2016.

The company increased its gross written premiums to $654 million, up 41 percent year-on-year from $464 million. The combined ratio improved to 95.8 percent, from 97.7 percent in the first half of 2015.

“Fueled by the strength of the company’s long-term client and broker relationships as well as its enhanced recognition as a Bermuda Class 4 (re)insurer, Qatar Re’s portfolio continued to expand in the first half of 2016,” Gunther Saacke, Qatar Re's chief executive officer, told the Gulf News Journal. “Moreover, a number of new major client relationships were successfully established, a testimony to the company’s growing franchise.”

Supported by a strong investment performance, Qatar Re’s net profit surged by 79 percent to $23.9 million in the first half of 2016, up from $13.4 million for the same period in 2015. The company currently cedes 70 percent of its business via a quota share agreement with its parent company QIC.

The company’s growth is supported by the provision of capital and a parental guarantee from QIC. As of June 30, 2016, Qatar Re’s shareholders’ equity stood at $560.9 million, almost double the amount of the previous year. This capital base is supported by QIC’s shareholders’ equity of $2.2 billion and a market capitalization of $5.4 billion.

“Qatar Re’s underwriting performance is not immune to fierce and increasingly irresponsible price competition in global reinsurance markets,” Saacke said. “However, the company’s distinct focus on knowledge-intense areas and entrepreneurial client segments have yielded a relatively low dependency on highly commoditized and competitive lines and segments, where business is ‘traded’ rather than underwritten.”

In addition, he added, Qatar Re significantly strengthened its facultative underwriting presence in its Dubai International Financial Centre (DIFC) branch by appointing Manik Kak as senior executive officer, Tejal Bartlett as regional head of energy and Manik Sethi as regional head of marine.

“Qatar Re’s 2016 half-year financial results testify to its robust positioning in an environment of continued economic volatility and reinsurance market softness, exacerbated by above-average global catastrophe losses in the second quarter,” Saacke said. “Qatar Re’s relative resilience reflects the increasing depth and diversification of our portfolio, with earnings from past years now coming through.”

For the remainder of 2016, Qatar Re will continue to focus on deepening its current book of business on the back of what has developed into a robust franchise. Also, the company will continue to enhance its internal processes across its global operating platform and further broaden its geographical footprint through the establishment of a branch in Singapore.

“Qatar Re has every reason to believe that its franchise, supported by its clients and in-house talent, will continue to grow,” Saacke said. “The company’s increasingly robust global operating platform will enable a further organic portfolio expansion.” 

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