Qatar Insurance Company Q.S.P.C. (QATI) Earnings Call Transcript & Summary

Hello, everyone. My name is Drew, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Qatar Insurance Company Q4 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to [indiscernible]. Please go ahead when you are ready.

Good afternoon, ladies and gentlemen. Welcome to QIC's Fourth Quarter 2023 Earnings Conference Call. I'm happy to introduce our speakers, Mr. Varghese David, the Group Chief Financial Officer; Mr. Chirag Doshi, the Group Chief Investment Officer; Mena Mounir, the Senior Vice President; and Mr. Fetan Keyrouz, the Investor Relation Manager.

Hi, good afternoon, good morning, everyone. Welcome all. We are pleased to report the financial highlights of QIC Group for the year ended 31st December 2023. The highlights are: QIC Group reported a net profit of QAR 615 million for the year 2023 with an ROE at 8% against a net loss of 1.1 billion during the previous year. Our gross premium written for the year was QAR 9.4 billion against QAR 10.8 billion in the previous year. The net insurance income or the insurance service results as per IFRS 17 for the group for the year was QAR 747 million. The group reported a net investment in other income of QAR 889 million for the year compared to QAR 794 million for the previous year, with an investment yield of 5.2% for the year compared to 4.8% last year. The regulatory solvency ratio for the group at the year-end stands at 188% before dividend and at 181% post the proposed dividend at 10% for the current year. 2023 has been a turnaround year for QIC, wherein we have demonstrated return to healthy net profits from all key operations of the company with dividend payouts to shareholders. QICs continued to strengthen its position as a leader in the profitable domestic markets in Qatar and in the MENA region. Meanwhile, the effectiveness of our set strategy over the past few years to exit from all loss-making and low-margin international business started yielding results, which is demonstrated by the group's return to healthy net profits during the year. Now a bit more on the gross written premium and the insurance income. QIC's gross written premium for the year, R as I told, it's QAR 8.5 billion or QAR 9.8 billion last year. Domestic and MENA gross written premium grew from QAR 2.8 billion to QAR 3.6 billion, continuing to drive underwriting profitability with a 25% growth in the gross written premium in the MENA region. During the year, we saw a major growth coming in from our UAE operations and our Oman operations primarily in the medical and the personal line segments. In particular, our UAE operations, which underwrote AED 1.4 billion during 2023 is expected to grow further in the medical enterprise and personal lines of business. While our domestic and MENA operations continued its stable bottom line-driven growth during the year, all our international operations performed well as per the business plan set for the year. Antares Global, our international brand, which includes Qatar -- Antares Lloyd in U.K., Antares R.E. in Bermuda and QIC Europe altogether generated a net premium volume of QAR 4.9 billion. So I mean, as we have been saying in the previous quarters, in line with the group's at strategy to have a balanced and diversified portfolio of direct MENA and international business currently at the year-end, our domestic business, direct business constitutes 37% of the overall business we write, whereas our international business is only 63% during the year, which used to be 81% in the previous year. The group's aim is to reach the balanced 50-50 portfolio mix between the direct and the international business. Now moving on a bit more to the international side. The group's strategic shift to reduce its exposure to low-margin international risks we've seen in the overall drop of the international premium underwritten by the group, which has now started yielding the sales and is demonstrated with a positive unmatching performance of the live international portfolio during the year. Also, the successful exit of the catastrophe bound home insurance, which we used to write in the U.S. and also the reduced exposure in the property cat side as positively reflected in the underwritten profitability for the year. In a favorable pricing environment, the group primarily continued to write its international business through its flagship international platform Ad Lloyd's Syndicate, which is called Antares Lloyd syndicate, which grew 8% compared to last year. As you are aware, Antares Lloyds in the kit, which has got a diversified line of specialty business is positioned to deliver, I mean, more -- I mean, a healthy bottom line driven business as we move on. Currently, around 75% of the business we write from the international side, other than the branch business, it's written through our Lloyd's syndicate. Now I mean, I'm a bit more on the MENA operations digital initiatives we're doing. In the direct and the MENA region, in specific, our focus has been on an emphasis has been on the digital transformation in the Mena personal insurance segment, which has been one of the key drivers for top line and the very healthy bottom line for the group with a new technology as a backbone, along with the team of internal digital marketing specialists, we've been able to successfully manage our customer service and customer service requirements with unprecedented speed resulting in record levels of online service penetration and settlement of on claims to the online mode. Currently, as you speak, in Doha, we write almost 60% of our personal lines motor business, in particular, to the B2B and B2C business. So this is a segment where as a group, we are more focused in the coming quarters and coming years, especially personal lines and also the medical business. So this is a deal overview of the group's performance for 2023. If you have any specific queries, we are most welcome to answer.

[Operator Instructions] We have no questions at this time. So I'll hand back over to the management team.

If there are no questions, should we consider this call as finished, completed?

We have no questions at this time, yes.

Sure. So if any question...

It's possible, I just have a quick question that we're trying to look up. With regard to the discontinued operations that in 2022, that they have been ongoing as well to 2023. I just wanted to check, are we to expect any further expenses from the divestment of micro strategies or from discontinued operations for 2024?

See, I mean the complete impact of the discontinued discerning operations, I mean, we have taken in our current 2023 financials. And as we speak, I mean, we don't expect any further, I mean, deterioration to that coming as we move on. And as you are aware that I mean all our reserves have been validated with external actuaries. So -- and I mean, on top of our internal actuarial reserve estimates we do. So that we -- I think we are reasonably confident from the reserving and some of the discontinued business point of view, we are relatively well positioned as of now.

So just one last question as well. We have seen an update with regards to the 2024/2030 Qatar strategic plan. Have KKIC done any time does a preliminary assessment to what kind of benefit have this plan is implemented on time and from extent? And given your recent focus also on domestic market, do you have any preliminary estimates of how much this could say, boost the top line? And where -- if there will be any concentration of premiums in any certain segments pertain engineering or so forth within your expectations or is it still at a very early stage?

See, as you are aware, QIC has always been the leader in Qatar. And with regard to Qatar's 2030 plan, I mean we are fully aligned to the state of Qatar's plan. I mean, we're being the biggest corporate insurer in town. Certainly, I mean, we do have a say in all these key aspects. But as we have done in the past, even when all the major products, which were undertaken in the past, whether it's the oil and gas expansion, whether it is 2022, everywhere, QIC has been the leader. So I mean we are the leader to the other insurance companies domestically and also in the region. So our strategy is clear just to make sure that I mean, that falls whatever risk you write that falls within our approved risk appetite, and we follow that. So I mean -- so we are very closely -- we are actively involved. I mean, with all the key initiatives the government strategy is happening in town. So we're being the insurance champion in Qatar and in the region. So this is an area where we closely monitor. And I mean as we move on, we will take it up from an insurance point of view.

Clear. And just one last question given you're interested in [indiscernible]. Has there been any development on the front of the medical insurance -- mandatory medical insurance for the private sector in Qatar out of the 2024?

As of now, the public information has -- I mean, all of us are aware, I mean what we know is and that is in the cards, but when it's going to happen, I mean that answer, I mean, at the moment, we don't know. But as far as -- I mean, [ QLM ] needs to speak for themselves. But we as insurer at QIC, I mean we are fully prepared. We are fully -- our systems are geared up our people are geared up. So the general market expectation is it's going to happen. But when it's going to happen, again, it's a government decision. So I think we've got to wait for the -- I mean the appropriate official signals to come in.

One last question final question apologies for that. After reserves that you validated, and basically, the book after the divesture or relatively [indiscernible] in terms of completing the full divestment. Would you be looking again after, say, a new expansion into a regional insurer or reinsure or that's not on the [indiscernible]?

The initiatives which we have taken in the international business is expected to release a sizable capital in the next 2 to 3 years. The release of capital from the international business will be deployed predominantly in the region. Currently, the plan is to grow organically. And as Varghese mentioned in his opening speech, the business in UAE this year, we've increased business in UAE by close to 60%. And we are expecting the top line growth to happen in UAE again, a significant top line growth in 2024 as well. So most of it is going to be organic, but we will definitely be mindful and watchful of any opportunities in the region. Nothing on cards as of now, but the focus definitely is on organic. But if there's a good opportunity, we may look at inorganic growth as well in the region.

We have no questions in the queue. So I'll hand back over.

So thank you. I think should we hang up now?

Yes. Yes. Thank you. That concludes today's Qatar Insurance Company Q4 2023 Earnings Conference Call. You may now disconnect your lines.