Doha Insurance Group Q.P.S.C. (DOHI) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Doha Insurance Conference Call. Please note that this call is being recorded. I'd now like to hand over to our moderator for today, Roy Thomas. Please go ahead.

Thanks, Lee. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Doha Insurance Group's Second Quarter and First Half 2024 Financial Results Conference Call. On this call from Doha Insurance Group, we have Osama Rayyan, the Chief Investment Officer; and Ghaith Jardaneh, the Chief Financial Officer. We will conduct this conference call with management, first, reviewing the company's results, followed by Q&A. I will turn the call now over to Ghaith Jardaneh. Go ahead, Ghaith.

Good afternoon, everybody. The insurance revenue at Doha Insurance Group for the first half of 2024 reached QAR 1.2 billion compared to 824,000 -- QAR 824 million last year. This growth was mainly driven by increases in both the engineering and energy lines of business. Insurance revenue, the composition of insurance revenue, we've noticed that there is a large increase in the fire and general accident lines of business compared to all other lines of businesses. The loss ratio of the company for the first half of 2024 was maintained at 52%, which is comparable to the same one experienced in 2023 -- or the first half of 2023. The company was able to reduce its net commission expense from 2.8% to 2.3% in the first half of 2024. And accordingly, with these, the loss ratios and risk commission expense, the company was able to achieve insurance service results of QAR 68 million in the first half of 2024 compared to only 58 million in the first half of 2023. And furthermore, the net underwriting results margin has increased to 9.1% compared to 8.9% for the same period of 2023. Operating expenses increased from QAR 62 million to QAR 64 million in the first half of 2024. However, as a percentage of insurance revenue, they declined from 9.5% to 8.5%. The company was able to slightly increase its allocation to investments assets, increasing from [ QAR 1.35 billion ] in June of 2023 to QAR 1.39 billion in June of 2024. The return on investments has improved and has increased from 5% in the first half of 2023 to 6.8% of the-- for the first half of 2024. Furthermore, the combined ratio at the company reduced from 83% in 2023 to 81% in 2024. The company was able to generate a net income of QAR 111 million for the first half of 2024 compared to only QAR 81.5 million in the first half of 2023. The net profit margins achieved as of the first half of 2024 reached 15%. Furthermore, this net income translates to a return of equity of 18.4% on an annualized level for the first half of the year and compared to only 14.3% in 2023. The company's total assets reached QAR 3.2 billion compared to QAR 2.8 billion as of the end of last year. Most of the growth has come from a corresponding growth in contract -- insurance contract liabilities, which increased due to an increase in unearned premium due to some -- due to the increase in underwriting that has been achieved at the company. Much of this underwriting is heavily reinsured, and accordingly, reinsurance contract assets increased in line with the increase in premium, resulting in this increase in assets. So we have both increase in assets and increase in liabilities that is driven mainly by the increase in underwriting, which is accordingly then resulting in an increase in reinsurance share of this underwriting. The company still enjoys a large investment portfolio relative to net insurance provisions, which is almost 3x the size of these net insurance provisions. The company has also been able to collect -- enjoy very strong collections in recent periods. It has been able to reduce its accounts receivable to QAR 402 million compared to QAR 461 million last year. And this receivable ratio has been reduced from 102 days to 58 days. And the company continues to enjoy a very strong solvency ratio of 255%, far exceeding the 150% that is required by the Qatar Central Bank. And we would like now to leave it -- to open it up for any questions you might have for us.

[Operator Instructions] Our first question comes from [ Yul Huc ] from [ EIIM ].

Congratulations on these good sets of results. I have 2 questions. Yes. First one is, most of the insurance revenue in the first half, the growth actually coming from the fire, general accident, which is P&C. Is the growth mainly driven by Qatar, by the country in Qatar?

Well, it's actually driven by 2 things. We had major growth in the Qatari market due to policies underwritten in both the energy and engineering lines of business, but also our subsidiary in DIFC in Dubai, which buys us reinsurance business from across the region, has also been achieving considerable growth.

So basically your general -- so your P&C, which is fire, general and accident, includes the energy as well, right?

Yes, it does.

Okay. And I've seen that your fire, general and accident revenue grew strongly in the first half. So besides [ distributed ], the segment net margin, insurance margin, should actually improve year-on-year. What's the reason behind it?

The -- I'm sorry. You meant which part?

The P&C segment, the -- for the P&C segment, which is fire, general accident...

Yes?