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

Hello, and welcome, everyone, to the Qatar Insurance Company Q1 '25 Earnings Call. My name is Becky and I'll be your operator today. [Operator Instructions] I will now hand over to your host, Varghese David, CFO, to begin. Please go ahead.

Good morning, and good afternoon, everyone. Once again, welcome all to QIC's quarterly earnings call. We are pleased to report the financial highlights of QIC Group for the first 3 months of 31st March 2025. The key highlights for the quarter are as follows: QIC Group reported a net profit of QAR 205 million for the quarter against a net profit of QAR 194 million with a 6% quarter-on-quarter growth in net profits. The gross written premium for the period was at -- stood at QAR 2.8 billion with a 3% overall growth compared to previous quarter. The insurance revenue for the quarter was QAR 1.9 billion. Insurance service expenses were QAR 1.53 billion, and the insurance service results was QAR 76 million. The group reports a net investment and other income of QAR 229 million for the period with an investment yield of 5%. The overall operating and administrative expenses remained flat. The solvency ratio for the group remained stable at 184%. Now going to the details. The results for this quarter continue to reflect consistent and stable bottom line focused growth story over the past 2 years with robust net profits of QAR 205 million at the 6% overall growth. The quarter-to-quarter increase in net profits with 11% at QAR 215 million, if we ignore the impact of Pillar II, which is effective from 1st January 2025. Now moving on to the other key aspects. We have achieved the target of having a well-balanced and a well-diversified portfolio for QIC Group, I mean as of now. The regional gross written premium increased to QAR 1.7 billion in Q1, up 17% quarter-on-quarter and now accounts to 59% of the group's overall premium compared to 20% in 2021. As we speak, QIC is one of the few companies in the region who has a well-diversified and well-balanced portfolio. Our current book of results are diversified across different lines of business and also diversified across the globe geographically. As -- and within the types of business, our focus is on the short tail lines of business in the -- especially in the personal lines of business. We've a clear set underwriting strategy to develop our risk focus -- our risk portfolio, which has been focused on short-tail lines of business, which means the risks are less than a year and also the risks are geographically diversified. Currently, explained earlier, the majority of the books, I mean, what you write, it is written to our MENA direct operations. Now going on further to the gross written premium details. Within the region, as you know, for QIC, Qatar is the nerve center. We continue to be the market leader and is the national champion for insurance for the past several years in Qatar. While we continue to be the market leader across most of the lines, our focus has always been to the bottom line driven growth by applying the latest AI technologies in the selection of the risk, of pricing and also by offering bespoke customers and big service, I mean, on our products. By this approach, we've been able to differentiate with other local providers by offering innovative products and customer-friendly services. The other key area where we operate is UAE where we have made major inroads to the market in the recent years where we are known -- and QIC is a known name for the last 57-odd years in the UAE market. Currently, we are among the top 5 insurers in the region. And using our domain experience, we have a focused approach to grow in the short-tail business, especially in UAE. We currently have created a critical mass, which should enable us to leverage and give further opportunities for the cross-selling and penetrating other untapped Emirates and the business avenues within UAE. In Oman, we see a maturing mix of portfolio and we currently see the fruits of successful inorganic growth model post our merger with Vision Insurance. While the other inorganic growth stories in the region are struggling, our teams on ground have been able to deliver bottom line driven growth as per the plan. In Kuwait, which is our other MENA operation, we've been operating -- where we've been operating for the last 12 years, we have been delivering a very stable and consistent profit for the past 12 years. And with our current plans in place, we expect further growth to come as we move on. Further, in line to expand our strategy to develop our regional business, QIC has taken a significant steps towards entering the Saudi market, which is one of the region's most dynamic and happening, underserved insurance market. QIC has currently presented a comprehensive proposal to establish a branch operation of Qatar Insurance Company, QIC, which is subject to regulatory approval. And this branch will operate under the regulatory capital requirements and will adapt clearly, the defined organizational structure and profitability model consistent with QIC's underwriting philosophy. Now moving on to the international side of our operations. We have completely exited from all our low margin and loss making international business, which we had in the previous years. And as of today, most of our international business is underwritten through Lloyd's syndicate in London, Antares Lloyds Syndicate. Antares is one of the 76 Lloyd's syndicates and 52 Lloyd's managing agents, which operate within Lloyd's of London, which collectively writes, as you know, gross written premium in excess of GBP 56 billion. Our underwriting -- Antares Lloyds Syndicate, which underwrites 17 plus diversified lines of -- specialty lines of business and with houses, 100-plus specialty underwriters and actuaries, has been consistently delivering bottom line growth for the past several years and is among the top quartile emerging upcoming syndicates within Lloyd's of London. Now moving on to the insurance results, further details. The insurance revenue for the quarter was QAR 1.9 billion. The insurance service expenses were QAR 1.5 billion and the insurance service result was QAR 76 million. In our journey to create this well-diversified and balanced, healthy portfolio, as we expected, we have seen a drop in the gross written premium during the financial year 2023 and 2024. And now in the current quarter, we see a growing top line. Currently, in the current quarter, the gross written premium has increased by 3%. This movement and evolution in the gross written premium base has resulted in a lower insurance revenue and earnings during Q1 of 2025. Also the lower recognition of insurance revenue in the earlier quarters of the current year compared to the higher claims incurred at the beginning of this insurance period has resulted in lower insurance income, which we expect this to even out as the quarter develops and the income on the premiums written will be recognized as the year matures. Our international operations also continue to deliver a very consistent and stellar performance during Q1 despite the impact of U.S. wildfires, which was not material for the group. Now moving on to the investment performance. While the global investment environment remained volatile, QIC Group continued to report stable investment and other income at QAR 229 million compared to QAR 245 million. With regard to the operating and administrative expenses, it remained flat. The group has a relentless focus through its digital transformation, process optimization and automation, using the leading AI technologies. And now we see the results, the tangible gains of the efforts, which we have put over a couple of years back. So this is a broader summary of the performance for Q1 2025. And if you have any further queries, we welcome to answer.

[Operator Instructions] We currently have no questions. This concludes our Q&A session and today's call. Thank you for joining. You may now disconnect your lines.