Total contributions reached BD9.1m (AED88.6m) compared to BD7.7m (AED75m) for the same period last year.

The total of Takaful revenues earned was BD4.3m (AED41.9m) compared to BD3.9m (AED38m) in Q2 2009, while profits achieved from Takaful operations reached BD1.5m (AED14.6m) compared to BD1.3m (AED12.7m) last year.

Younis J Alsayed, Takaful International chief executive officer, said: “Our financial results state our capability and strength in dealing with the variability of Bahrain insurance market and adapting to various financial scenarios to ensure effective market performance. We have been able to increase our share in the insurance market by implementing successful strategies and marketing plans; in addition to our commitment in providing innovative insurance services that are in compliance with our shari’a principles.”

The ratings agency said the ratings reflect ADNIC’s “superior risk-adjusted capitalisation, its strong business position in the United Arab Emirates insurance market and robust financial performance”.

AM Best now estimates that ADNIC, the UAE’s second largest insurer, is likely to experience growth rates of 15 per cent-20 per cent annually during the next two years as it continues its expansion of its distribution network and focuses on increasing sales of personal lines of business.

Net premiums are likely to increase by 20 per cent-25 per cent during the same period as the company increases its retention, said the firm.

A statement from AM Best said: “ADNIC has strong and consistent technical performance with combined ratios below 75 per cent. AM Best believes that the company’s combined ratio is likely to increase and stabilise at around 85 per cent to 90 per cent in the medium term.

“AM Best believes that ADNIC’s excellent risk-adjusted capitalisation will be retained despite the increased retention and the resultant increase in capital requirements. Capital and surplus, which had declined in 2008, recovered during the last year and the company benefits from a very strong underwriting leverage of 50 per cent (gross written premiums over capital and surplus).”

However, the change in the company’s methodology of calculating unearned premium reserves (UPR) will have a one-off impact on the claims ratio in 2010, said AM Best.

“Furthermore, the increase in retention is likely to increase the company’s expense ratio, which has typically been negative due to profit commissions. Investment income is likely to remain in single digits given that the largest portion of ADNIC’s invested assets is in cash deposits,” it said

ADNIC is the second-largest insurer in the UAE with an estimated market share of 16 per cent among the local insurers. The company experienced strong growth during 2009 when its premiums grew by 16 per cent, while the market as a whole grew by a more modest 5 per cent.

According to AM Best, the increased growth rates were a result of the introduction of new products and increased sales in medical expenses business.

The ratings agency has also affirmed the financial strength rating of A (excellent) and issuer credit rating of ‘a’.

AM Best said the ratings reflect OIC’s “excellent underwriting performance and leading business position in the UAE insurance market”.

A statement from the ratings agency said: “An offsetting factor is the exposure to variability of the company’s prospective risk-adjusted capitalisation, also in relation to the still high concentration of the financial assets portfolio.”

AM Best also said it’s rating comes after Mashreqbank – the major shareholder of OIC, with 63.65 per cent of shares – appointed members to OIC’s board. “Mashreqbank, until now, had no representation on the insurance subsidiary’s board. However, the new seven-person board includes two direct representatives plus one non-executive director of Mashreqbank, and one additional representative of Mashreqbank’s main shareholders. AM Best believes that this reduces the level of independence of OIC.

“Furthermore, future decisions involving the board, such as dividend distribution or investment strategy, could add downward pressure to OIC’s risk-adjusted capitalisation, which AM Best believes is adequate at the present time but exposed to a potential deterioration to a level not supportive of the company’s current ratings.”

The insurer reported a net profit of AED26.5m from January to June this year, compared to a net profit of AED48.2m during the corresponding period last year.

Gross premium income reached AED332.8m, compared to AED354.9m in 2009, while net underwriting income for the period was AED33.8m, compared to AED26.7m for the first half of 2009.

Yesterday, United Insurance Company posted an AED8m net profit for the first half of the year, down 60 per cent on the same period last year.

In its latest financial results, the insurer saw net profits drop from AED19.9m in the first half of 2009, to AED8m for the corresponding period this year.

Earlier this month, Al Khazna Insurance Company reported an AED18.9m loss for Q1 this year.

In its latest financial results, the insurer saw net profits drop from AED19.9m in the first half of 2009, to AED8m for the corresponding period this year.

Net underwriting income also dropped 62 per cent to AED8.2m for the six-month period, from AED21.4m for the first half of last year.

However, gross written premium increased 33 per cent to reach AED69.3m for the first half of this year, compared to AED52m last year.

A statement from UIC said: “We are confident that the year 2010 will be another strong year for the company.”

In its latest financial results, the insurer posted a net loss of AED18.9m for the first quarter this year, compared to a AED39m loss for the same period last year.

Gross written premiums reached AED74.9m, compared to AED48.1m for Q2 last year, of which fire, motor, medical, marine and aviation, and accident and others, made up AED4.2m, AED30.5m, AED29.2m, AED3m and AED8m respectively.

The underwriting surplus is AED11.2m, compared to AED10.7m in Q1 2009, while the investment deficit dropped from AED37.7m in Q1 last year, to AED18.5m for the first quarter this year.

The ratings agency said the financial profile of the insurer “has weakened” therefore it is placing the firm’s BBB rating to BBB-.
A statement from S&P said the negative outlook reflects our continued concern about ABNIC’s financial profile.
It said: “The downgrade of ABNIC, the parent company and core operating entity of ABNIC Group, reflects our view that the group’s financial profile has weakened. This, in turn, reflects our belief that ABNIC Group’s investments, liquidity, capitalisation, and financial flexibility have all weakened, primarily due to continued debt-funded property investment and rising leverage ratios.”

Last month S&P placed the firm’s BBB rating on creditwatch negative.

The new venture is expected to open by the end of the year.

Khalifa Abdullah Al Subaey, QIC group president and chief executive, said it will most likely base the life and medical business in the Qatar Financial Center.

Qatar Insurance Company reported a net profit of QR216.65m in Q1 this year, up 2.15 per cent on 2008. Year-on year, the insurer also recorded a 4.2 per cent increase in net profit, up from QR530m in 2008 to QR552.5m last year.

The move comes after www.policy.ae revealed in May that Doha Bank Assurance Company applied for its takaful life insurance licence.
The Qatari insurer filed its application with the Qatar Financial Centre at the beginning of the year as part of its plans to provide life insurance alongside existing product lines, such as health insurance.

The ratings agency said the financial profile of the insurer “has weakened”, therefore it is placing the firm’s BBB rating on creditwatch negative.
A statement from S&P said it is adjusting the ratings to reflect ABNIC’s, the parent company and core operating entity of ABNIC Group, weaker financial profile, pending further dialogue with the company. The statement added: “This, in turn, reflects our belief that ABNIC Group’s investments, liquidity, capitalisation, and financial flexibility have all weakened, primarily due to continued debt-funded property investment and rising leverage ratios.”
S&P said ABNIC Group has a consistently high-risk investment strategy, concentrated primarily on property – 70 per cent of total investments on March 31, 2010 – and secondarily on equities, including investment in affiliates, 13 per cent. According to the ratings agency, the group continues to make significant investments in property, so its relative exposure to this asset class is likely to rise.
However, S&P aims to resolve the creditwatch status on ABNIC within the next week, after meeting with the management of ABNIC Group and receiving more information.

The statement added: “We will discuss with management, in detail, the group’s forecast financial profile up to the end of 2012, especially its investment plans and returns, debt level and structure, and liquidity and cash flow profile.
“At this stage, were the ratings to be lowered, we do not anticipate lowering them by more than one notch. We could affirm the ratings if ABNIC can demonstrate a satisfactory plan to achieve the required credit metrics. We could lower the ratings by one notch if the group does not demonstrate a clear path toward restoring its credit metrics.”

In its half-year results, the reinsurer recorded a net loss for the first half of 2010, compared to a US$8.8m profit for the same period last year.

Gross written premium for the first six months of the year increased 8.6 per cent to reach US$177.1m, up on last year’s half-year figure of US$163m. Investment income dropped from US$15.4m in the first half of 2009 to US$5.5m for the same period this year.

A statement from the firm said returns from reinsurance, Arig’s core business, remain positive with non-life combined ratio of 97.3 per cent. The statement said: “Impacted by the volatile global equity markets, Arig recorded US$ 2.8m loss for the first half of 2010.”