Liva Group SAOG ($LIVA)

Good morning, everyone. Ramadan Kareem to all. I'd like to welcome you all to Liva Group's MSX session today on the 9th of March. It's 11:00 a.m. Oman time, and this is for our full year results for 2025. I'd like to read out the disclaimer on my screen. The material in this presentation has been prepared by Liva Group SAOG, Liva, and is general background information about Liva's activities current as of the date of this presentation. This information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information, if any, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information having regard to these matters, any relevant offer documents and in particular, you should seek independent financial advice. This presentation may contain forward-looking statements, including statements regarding our intent, belief or current expectations with respect to Liva's businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward-looking statements. Liva does not undertake any obligation to publicly release the results of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Liva's control. Past performance is not a reliable indication of future performance. I'd like to bring your attention to today's agenda. We will begin today's meeting with an opening and introducing the presenters on the call and some introductions, followed by a presentation on our group financial performance, the outlook and finally, a Q&A session, which will allow people to ask questions to the presenters. May I please ask for everyone joining on MS Teams to please raise your hand via the icon on teams and I will call out your name and ask you to ask your questions. Alternatively, you can also ask any questions in the chat function on teams. Could I please ask everyone to mute when we present as well. I'd like to introduce Liva's representatives today. Today, we have our presenters, Mr. David Healy, our Group CEO; and the Honorable Dr. Dhafir Awadh Al Shanfari, our group COO. On the line, we also have Mr. Mohammed Alles, representing Liva Insurance Oman; Mr. Addal Sarwar, representing Liva Insurance BSC; Mr. Mohamad Al Tooblani representing Liva Insurance KSA. And myself, your moderator for today, Sara Faraj, the Group Legal Director. I'd like to now pass on to our CEO, to give an introduction. David?

Thank you very much, Sara, and good morning to everybody. To introduce myself, my name is David Healy, and I have just recently joined Liva. I started at the beginning of January as the Group CEO, and I am very much honored and proud to lead such a great organization with equally great values and ambitions. Myself, I have almost 40 years' experience in the insurance sector. I've worked for some of the largest organizations, including Aegon insurance, Aetna, U.S. health insurer and more recently, Monument Reinsurance. And I've worked and lived in both Europe and the Middle East. I think it'd be appropriate just to start today's session with just a quick reflection on the current geopolitical situation. So clearly, unsettling times for everybody, but I want to just reassure the group of how we are positioned ourselves to deal with this situation. We have all business continuity and contingencies in place for current and future eventualities. So what I will share with you is we have 5 key priorities at this stage. One is, as you would expect, to focus on our staff safety and security and our operational continuity. Number two is supporting our customers. It's important that we're here for them when they need us. Number three is actively monitoring our underwriting and risk accumulations and exposures. Number four is maintaining strong reinsurance protection and capital resilience. And number five, of course, is to comply with local recommendations and regulations in all territories. So hopefully, this situation will be somewhat short-lived, but I think we are in a robust position to deal with the challenges that may lie ahead. Looking back, 2025 results certainly marked a structural transition for the Liva Group. Over the past 2 years, the focus was on integration, remediation and stabilization. Today, we are operating on a unified disciplined GCC platform. Our governance is aligned, capital oversight is strengthened and the underwriting standards are consistent across our markets. We have achieved scale. We have over 2 million customers and passed a threshold of USD 1 billion in premium last year. But scale is no longer just the only objective. The emphasis now is clear. It is improving our earnings quality, enhancing our capital efficiency and delivering sustainable shareholder returns. This is certainly not a strategic shift. The strategic direction remains consistent. It is an evolution from building a platform to optimizing it. Sara, if you could move on to the next slide, please. And the next. So looking at our financial performance for 2025. So Liva delivered sustainable growth through marginal -- sorry, through margin discipline and proactive risk management. Revenue reached OMR 480 million, net profit after tax was OMR 14.2 million, which is a OMR 19 million year-over-year improvement. The insurance service result returned OMR 13.7 million and an investment result of OMR 17.2 million. Also, our solvency levels remained comfortably above regulatory minimums across our business units. These headline numbers matter, but the composition matters even more. Our growth was very selective, concentrating on the UAE and KSA, where margins justified any expansion. Underwriting profitability improved materially year-over-year. And our investment income remained resilient with a conservative allocation framework. This reflects tighter pricing discipline, better risk selection and improved complaints -- sorry, improved claims controls. Operational stability has significantly improved. Next slide, please, Sara, is a comparison of our 2025 results against 2024. So as you can see, our revenue grew by 24% year-over-year. The insurance service results swung positively, reflecting underwriting recovery rather than an accounting movement. The improvements reflect strengthened underwriting governance, portfolio reshaping away from weaker segments, claims oversight enhancement and, of course, cost discipline embedded across our markets. Our investment income grew by 20%, supported by asset growth and portfolio optimization. Our operational earnings quality has improved, but volatility drivers within the underwriting results have been reduced. Earnings sustainability or predictability are now strengthened and our capital management is optimized. This delivered a profit after tax of a OMR 19 million year-over-year increase. We also reinstated a cash dividend this year to shareholders, reflecting this improved earnings stability. Next slide, please, Sara. Looking at our diversification, our geographic footprint is now a clear advantage. Our product breadth provides flexibility. The UAE and the KSA do remain primary growth engines where we see significant upside opportunities, but our #1 position in the Oman market really anchors our regional advantage and our diversification goals in core markets. Liva grew ahead of market averages with disciplined thresholds. From a product mix perspective, medical concentration has reduced somewhat. Nonmotor and life have increased. Motor remains core, but is very much selectively managed. This is deliberate portfolio rebalancing. Diversification reduces volatility and strengthens capital utilization. Our strategy reflects a commitment to deepen scale and profitability across the GCC. Next slide, please, Sara, takes a look -- a deeper look at our investment income. So we have exercised technical discipline on investment and portfolio management. The asset base has increased to OMR 351 million. Our net investment income rose to OMR 17.2 million and yield has steadied at 5.2%. Maintaining yield while expanding the asset base reflects active management in a declining rate environment. The allocation remains conservative with over 90% of our asset base represented in bonds and deposits. Equity exposure is controlled. We have a clear risk tolerance threshold to manage any inevitable market volatility. Market duration risk is managed and the portfolio supports clear solvency, liquidity and earnings stability. This is also reflected in our AM Best rating affirmation of A- excellent rating this year -- last year. And finally, Sara, from me, I look at our return on equity return -- result. So the recent performance reflects more than just improved market conditions. It reflects deliberate structural action following prior weather volatility and underwriting underperformance. We address the root causes, tightening underwriting standards and enforced pricing discipline, reducing earnings volatility through portfolio reshaping and reinsurance optimization and improving cost efficiency and capital allocation. As a result, our earnings quality has strengthened. Our return on equity is sustainably back into double-digit territory, and this is broadly consistent with the performance across the GCC. This is structurally stronger return profile and not just a cyclical uplift. I'd like to now hand over to my colleague, our Chief Operating Officer, Dr. Dhafir, who will share the outlook and operational priorities. Thank you, Dhafir.

Thank you, David. Happy to be back this year with our respected investors. The Liva story continues with our strategic ambition to grow and ensure sustainable value. 2025 was a milestone year. Among many things, we crossed the $1 billion GWP mark in November last year. We are now serving more than 2 million customers across the GCC. As David mentioned, the reaffirmation of the AM Best rating, which reflects continued confidence in the group. We have completed the Kuwait rebranding, finalizing the full integration, which started a few years ago. We continue to strengthen our leadership across the group, and we'll continue to invest in top talent. While we celebrate these milestones, they are setting the foundation for more to come, more growth at scale enables operational leverage, diversification benefits and capital efficiency. Sara, kindly, next slide. So now we believe execution centers around 3 clear pillars. Number one, profitable growth above market. We aim to grow ahead of core GCC markets selectively. UAE and KSA remain expansion priorities. Oman, continuous disciplined leadership, overall growth, management means return on thresholds. Number two, structural margin improvements, leading COR trajectory in the market with pricing governance enforcement, clear analytics, claims analytics and cost optimization, digital claims and process automation will improve predictability over time. The third key pillar is capital discipline and shareholder returns. We will maintain strong solvency buffers, progressive dividend policy philosophy will be followed. Reinvest, we'll return selective and return driven. So reinvestment will be very selective and return driven. These are basically some of our key pillars moving ahead. Moving on to the next slide, Sara. As you look at the geography, we have always maintained presence in the GCC as one of our core advantages. We are still continuing growth in different markets with potential acquisition deals in Saudi and future other markets. This gives you a snapshot of what we did in '25. As you can see from our home base in Oman, our growth has been very positive with 15% growth. We are preserving market leadership and enhancing technical margin discipline, pricing automation. We are deepening SME and commercial penetration while protecting our core motor economics. In the UAE, our year was exceptional. We have grown 27% on GWP and insurance revenue, and we defend our core margins, target profitable growth opportunities. We expect Life and CL to diversify the mix. We are strengthening our broker relationship and corporate partnerships. In Saudi, which is another core market for us, as you're aware, we are progressing ahead with our Malath discussion, but there has been positive growth, 29% growth in insurance revenue during '25. We've accelerated and -- we have an accelerated disciplined growth organically in targeted segments. We have also looked into diversifying retail life and SME platforms. We are building scalable distribution capabilities while maintaining underwriting controls. In the emerging markets in Kuwait, we have maintained a lean operation base focused on sustainable technical profitability, optimizing our expense base. In Bahrain, we also are capturing growth from mandatory health rollouts in the future and build a resilient cost-efficient platform positioned to capture market expansions. But overall, I think this sets the stage for a stronger '26, and we obviously would be more than happy to address more country matters in the Q&A session. That concludes my presentation. Back to you, David.

Thank you, Dr. Dhafir. So hopefully, we have shared a good insight into our 2025 results. We believe it was a robust financial performance. And more importantly, our platform is very well positioned as we drive into 2026 and beyond. In summary, we have achieved scale across our businesses. Our integration from previous transaction is now complete. Our transformations have been initiated. Our earnings portfolio is stabilized, and we have diversified our portfolio and strengthened our capital base. Importantly, our focus is now on customer excellence. We will continue to invest and develop our digitalization capability to match our customer needs. Also, as Dhafir mentioned, we have a key focus on talent attraction and retention, particularly at a senior level across the organization. And finally, we wish to promote and leverage our brand across the GCC. Platform today is structurally stronger and in better position than 2 years ago. And the next phase is for consistent capital aware value creation. Thank you for your attention. And please, we'd like to welcome any questions you have, either myself or Dhafir or my 3 colleagues representing our business units will be delighted to answer any questions we have or provide any information that you would like. So Sara, I can hand it back to you to mediate the questions, please.

Thank you very much, David. I'd like to invite our guests to raise their hands on MS teams and I can call you out by name and ask any questions. Or alternatively, you can type out your questions on to the chat function on teams.

I think, Sara, we must have been very clear.

Looks like it. It appears that there are no questions from the group. And if that's all, I'd like to thank everyone for joining today's session. Thank you very much.

Thank you, everybody, who joined. Appreciate your time this morning. Stay safe. Thank you very much.

Thank you very much.