Arabia Falcon Insurance SAOG ($AFIC)

Good afternoon, everyone. Welcome to the Annual Investors Meeting session. My name is Ahmad Al Tayeb. I'm the Chief Financial Officer. I have with me here Mr. Roland Zaatar, the Chief Executive Officer; Fayez Mufti, the Investment and Treasury Manager, who will be presenting the financial results for the financial year 2025. We'll keep the question-and answer until the end of the session. And now I will hand it over to Fayez.

Thank you, Ahmad. Good afternoon, everyone, and welcome to the investors meeting. 2025 was an exceptional year for Arabia Falcon Insurance, we witnessed that. Let me take us to the next slide? 2025 saw tremendous growth in our gross written premium, we did OMR 33.2 million versus OMR 29.8 million. Our investment income increased by 29% for the year. And our net profit grew by 44% versus 2024. 2025 was a very good year for our shareholders' equity as well. The company's shareholders' equity grew from OMR 22.2 million to OMR 23.6 million. If I compare 2025 versus 2024, we did better on all metrics, be it our insurance revenue, gross premiums or our net profitability. Let me take us to the next slide. The next one. I'll come on to the outlook for 2026 later, the next slide. So if I take you through the detailed comprehensive income, this is a chart -- this is a table for the last 4 years. Our insurance revenue in 2022 was OMR 21 million, and now it has go on up to OMR 25 million. Similarly, our insurance service results were OMR 700,000 in '22. Now they are almost double at OMR 1.5 million. I think to like a few items down. Our investment income has grown from OMR 1.7 million to OMR 3.2 million. So there has been tremendous growth in our insurance revenue, our insurance service results, our investment results and the net profitability as well. Our net profitability in 2022 was OMR 1 million and now it has grown up to OMR 2.2 million. It is a 3-year CAGR of 49%. And if you see on a 4-year period, it has almost doubled -- even more than doubled. Let me take us to the next slide. On key performance indicators. If we see over the last 2 years, our insurance profit margins were negative and now they're in a positive 3.7%. Our net profit margin was 3.1% in 2023. Now it has grown up to 6.9%. Return on equity was 3.6%, and now it is 9.9%. So from an investor's perspective, our return on equity has tripled. Our insurance profit margins have increased. Our revenues have increased and the company is in a solid position compared to the previous year. Next slide. Yes. So if you want to see where our money or insurance premium is coming from, this is a pie chart. Our main source of revenue is Life, and it is growing at a fast pace. It has shown tremendous potential and has shown tremendous results. The Life premiums were OMR 9.5 million in 2024, and now they are OMR 16.9 million. Our P&C saw us a little bit shortfall, while our Medical and Motor premiums were almost similar compared to last year. Next slide. So this is a 5 years profitability trend from gross written premiums and net profit angle. We have reached our highest ever profit in the last 5 years. We have seen highest ever gross written premiums in the last 6 years, in fact. And it is very reassuring to be and see like how 2025 went. Next slide. We have a 6% market share. And along the [indiscernible] , we have maintained that market share with a strive to improve it. Let me take us to the next slide. So our market share in 2024 was 5.6%. It is now 5.9%. We have -- we believe we can further improve it, and we are working in that direction to further improve our market share. Next, coming to the dividends. So based upon our excellent profit this year, we intend to share the same with our investors. And we are proposing a 12% or [ PHP 12 ] per share dividend on the share capital, which amounts to OMR 1.2 million. Our retained earning right now is OMR 1.7 million after we will transfer like OMR 600,000 from net profit to the contingency reserve. This 12% dividend, we believe, is a validation of the shareholders' patience in the company. For the last 2, 3 years, it was lower, but now we have come back with, on a solid dividend to the shareholders. Let me now, can you take me to the outlook for 2026, 3rd slide? So 2026 will be a challenging year. Number one, will be the investment income that we see can see a decline because of the mark-to-market impact on our portfolio. A lot of equity has fallen in the recent month. Similarly, the bond yields have increased. So there will be some impact on our portfolio as well from an investment income perspective. However, we expect our insurance book to yield well and compensate for the loss in investment income. The management remains committed to growing the insurance portfolio in a disciplined and profitable manner, and will maintain a tight control over expenses so that we can improve technical profitability and shareholder return. With this, I would like to conclude the presentation, and we'll open the floor for any question and answers that anyone has.

And just one clarification here regarding the expected drop in investment income. What we mean expected drop compared to this year, but we will continue to deliver higher investment income above the average last few years. But it will be challenging to match the investment income that we achieved in 2025 due to, as Fayez mentioned, the increase in yield and the drop in bond prices and the drop in interest rate in the bank deposits. But the investment income will not be lost, will be massive. But we will try to match what we had the previous year, but it will be very challenging.

If any participant has any questions, we would like to answer your questions....

Anyway, this presentation will be -- the recording will be published in MSX today after the market hours. In addition, you can see our financial report, annual report and the company's website. It's already there. So if you have any questions later on, you can email the Investment Relation officer, and the email and contact numbers are all on our website.

Thank you, Fayez. Thank you, Ahmad. Let me add a couple of comments from my side regarding the 2025 results. Hello, everyone. This is Roland Zaatar the CEO of Arabia Falcon Insurance Company. Just I think, as Fayez and Ahmad talked about the investment side and how solid is our investment return, and what did we do with the company through the 2025 where we were versus where we are today, I want to add a couple of highlights related to the technical side of the company. And if you look at the overall market and you compare the results between one company and another, you will notice that Arabia Falcon Insurance Company is the only company in the Omani market showing insurance revenue growth year-on-year. And it's and by far, more than anyone. It's over 150% versus our competitor, they are year-on-year down on their insurance revenue. This is one thing. The second thing, which is very important when it comes to any insurance company, it's the reserving. We delivered solid results. We delivered record results in the history of the company, but it's not only the profit that we deliver. We strengthen our reserve across different segments, across different products. So today, we -- I'm proud to say that we are a very solid company, capable of delivering profit, but not only capable of delivering profit, having solid reserves in case we have any out of normal events, so we can absorb it today within our results. The one thing which is related to the top line, yes, in terms of insurance revenue, we grew the book by double digit in terms of GWP. And most of you probably today, they would be looking at the insurance revenue year-on-year rather than the GWP. Our GWP is specifically under the P&C business was affected by the loss of one of the major accounts, which is the Ministry of Finance, but this major account didn't impact our net results because it's a very large account where we would be seeking facultative support. We were placing big part of it in the facultative market. That's why we don't see the impact on our net revenue and our net profit, and that's one. On the Motor side, I think we came out, at 2023, we had a challenging year when it comes to the motor business. And this is after the COVID. And I think like any insurance company, we were very greedy during the COVID and by pushing the rates up -- down, sorry, to get as much as possible business because at that time, the Motor business was running at a very low loss ratio below the 30%, 40%. Then came out of COVID with the -- and you know all this would be accident back to street and the spare parts price going drastically up. That's why we had some challenges in 2023. It took us through the full 2023 year to fix it by 2024. We started the fixing in 2025. We can say today, we are on the right track when it comes to the Motor business. We did some segmentation across all our book. We did some diversification across our book. We decided in which segment we want to play being TPL comprehensive being, I don't know, Chinese versus Japanese being different category to be today on the right place to deliver some of the profit and take it from there to grow the book of business that we have today and to grow it profitably. And this is the idea behind it. And that's why we have higher profit under the technical, which is mainly coming from the Life side, from the Motor side, P&C was always profitable. We are -- we're still doing some medical business, but we are category B as per the regulators. And we're still accepting on a net basis, on reinsurance basis, the medical business from the rest of the market. This is it from my side unless you have any questions.

If no questions, we can close the session. Thank you, everyone.

Thank you, everyone. And it was a pleasure presenting to you the results of 2025. Hope you have a great day, and thank you all.