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

Hello, and welcome to the Doha Insurance Group conference call. Please note that this call is being recorded. I would now like to hand over the call to Roy Thomas. Please go ahead.

Thanks, Janet. Hello, everyone. This is Roy Thomas from QNB Financial Services. I want to welcome everyone to Doha Insurance Group's First Quarter 2025 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.

Hi. Good afternoon, everybody. We would like to present you with an overview of the company's results for the first quarter of 2025. Our premiums in the first quarter of 2025 have reached QAR 882 million compared to QAR 748 million with a growth rate of 18%. The composition of premiums has relatively -- has more or less stayed the same with fire and general accident lines of business constituting around 71% in 2025 compared to 70% in 2024. The gain of 1% came at the expense of a drop in life and medical from 14% to 13%. The loss ratio experienced at the company has reached 56% in the first quarter of 2025 compared to 48% in the first quarter of 2024. The driving force behind the higher loss ratio was heavier claim costs in our medical and life lines of business. Net commission costs increased from 1.7% to 2.2% and that is because we had a major policy underwritten during the first quarter of 2025 that is heavily -- that was -- that had a major brokerage on it, which resulted in this increase. The company's net underwriting results reached QAR 47.5 million compared to QAR 47.4 million in the previous quarter. The operating expenses at the company were steady. They decreased slightly from QAR 31.7 million to QAR 30.9 million in 2025. But as a percentage of premiums -- of gross written premiums, they've decreased from 8.2% to only 6.7%. Investment performance has been relatively steady. We were able to achieve 8.7% return on our investment portfolio in the first quarter of 2024. This has reduced to 8.6% during the first quarter of 2025. We were able to grow the investment portfolio from QAR 1.3 billion in 2024 -- in Q1 2024 to an average of QAR 1.47 billion in the first quarter of 2025. The combined ratio increased from 76% to 81%. This was mainly attributed to the increase in loss ratio that we experienced in the same period. Net income for the group has increased from QAR 71.4 million in Q1 2024 to QAR 72.02 million in the first quarter of 2025. Despite the increased revenue, however, the margin -- the net profit margin relative to insurance revenue has decreased from 19% to 16%. The decrease is mainly attributed to also the increase in loss ratio that has happened. The company was able to generate a return on equity of 22.4% during the first quarter of 2025. This is actually a reduction from the return on equity ratio that was achieved in the first quarter of 2024, which actually reached 24%. Again, the reduced profitability is a result of the increased loss ratio at the company. Total assets, total liabilities and total equity have remained at a similar level during the first quarter of 2025. The slight reduction in equity is due to the payment of the dividend during the first quarter of 2025, which reduced equity. And profitability generated by the company in the first quarter was not enough to cover the entire amount lost for the payment of dividends. The company still enjoys a very strong solvent position. Its investment portfolio currently triggers -- currently clocks at QAR 1.47 billion compared to net technical reserves of QAR 444 million. So it's almost -- more than 300% of the company's insurance obligations. Accounts receivable at the company have increased substantially during the first quarter of 2025. It increased by approximately QAR 400 million. This is attributed to underwriting a very large policy in the energy line of business, and this policy is scheduled to be settled during the month of May. So it will be settled during the second quarter of 2025. So by the end of the second quarter, we're expecting accounts receivable to reduce substantially and to go back to its normal levels. The company's solvency ratio as of the first quarter has reached 241% and is still at a very healthy position and far exceeds the required solvency ratio by the Qatar Central Bank, which is set at 150%. Thank you very much. Please, we leave it now. We'll open the floor for any questions.

[Operator Instructions] Your first question comes from the line of Lee Beswick.

Can you hear me?

Yes.

Congratulations on another good set of results. I just wanted to ask how the company looks at share buybacks because your stock is -- if you look at it versus a couple of years ago, it's pretty much on the same valuation because you've obviously grown in that time and growing well and growing profitably. So the stock is still undervalued. So how do you think about that?