Oman Reinsurance Company SAOG (ORIC) Earnings Call Transcript & Summary

Good morning, everyone. This is Muzamil Hussain from Oman Reinsurance. This is our first meeting for the 2025, the Investor Relations. We'll be presenting high-level numbers on the financial results for 2024. And after the presentation, if there are any questions from your side, we'll be taking it. And the whole meeting will be recorded for the purpose of MSX. So I'll start with the presentation. Just let me know if you can hear me if there's an issue on your side, just drop a message in the chat box. We are happy to present our 2024 results. These are the key highlights. That's how we measure the performance of the company. And if you see the 4 key metrics, in terms of reinsurance revenue, that is the IFRS 17 metric for -- it's a proxy of cross earned premium that we were using under IFRS 4. That is IFRS -- now in terms of reinsurance revenue earned is OMR 49.9 million for 2024, which is 19% higher than 2023. If you look at our combined ratio, combined ratio is 94.5% on a discounted basis, which is higher than 2023 combined ratio of 91.3%. Primarily, it is higher because there were a couple of large losses. And then there was also a nat cat event in Dubai, which affected our results. In terms of profit after tax, if you can see, even after this higher loss activity, our profit after tax was 18% higher than 2023. We closed at OMR 3 million and also the return on equity went up from 8.4% in 2023 to 8.9% in 2024. In terms of our reinsurance revenue, which is our gross earned premium, we can see as a consistent growth from 2022 to 2024. We have done a 19% growth from 2023. So we did OMR 42.1 million in 2023, and then we have achieved OMR 49.9 million in 2024. In terms of our combined ratio, as you can see, we had 2022 and 2023 at around 91%. 2024, it's slightly higher, mainly because of a couple of large losses and Dubai floods. If you look at the cost ratio, the cost ratio has been consistent and is on a decline. In 2024, it is at 32.5%. In terms of our cost controls, as you can see that our overall cost base has not increased significantly from 2023 to 2024. And if we see a metric that we follow internally that is our total expense to gross written premium. Gross written premium is a metric under IFRS 4 has been declining. So we did 8.6%. And in 2024 -- in 2022, we did 8.6%; in '23, 7.4% and in '24 6.4%. In terms of overall profitability, we can see that the overall profitability of the company has been consistently growing. We did 2022 at OMR 2.1 million; in '23, it is OMR 2.5 million and in '24, it's around OMR 3 million. So there's an 18% growth from '23 to '24. Also, the other metric that we use is the return on equity. And so return on equity has been consistently going up. It is from 7.5% increase to 8.4%. And we closed 2024 at 8.9%. In terms of investment returns, we have 2 sources of revenue generation. That is one is on the core underwriting business and other is the investment side. If you can see our investment returns have been going up, primarily driven by sound and prudent investment allocation and also the overall increase in the interest rate environment over the past couple of years. So we take 2022 at 4.1% investment return increased to 4.5% in '23, and then it closed '24 at 4.9%. In terms of invested assets, they have also been growing consistently. So we have been increasing. We did OMR 57 million was a total invested asset in '22, increased to OMR 64.4 million and then in 2024, it is OMR 76.6 million. So the overall total investment income is driven by 2 factors. One is growth in the invested assets and also the actual return on the invested assets. So both these factors have been contributing in the overall increase in the investment income. In terms of our book value of shares, as you can see that our book value has been consistently growing. So we did at around OMR 0.086 in 2022. We increased to OMR 0.097 in '23 and OMR 0.107 in '24. If we compare from the IPO price, we have -- the total book value of the share has increased by 24% compared to the initial IPO price. The overall net equity of the company as at end of 2024 is OMR 35.3 million compared to OMR 32.2 million last -- in 2023. So that's an increase of 9.6%. So the additional -- the difference between ROE and the increase in equity is driven by improvement in the unrealized fair value on the investment portfolio. So that's all from our side in terms of the investment results. If you have any questions, please raise your hand, and then we'll take it. If there are no questions from your side, then we will be concluding the meeting. In the meantime, if you have any questions, please write to the Investor Relations email ID that has been provided on our website. Thank you very much. Thank you for your time today. Take care.