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

Good morning or good afternoon all, and welcome to the Qatar Insurance Company Q2 '25 Earnings Conference Call. My name is Adam, and I'll be your operator for today. [Operator Instructions] And I will now hand the floor to Varghese David to begin. So please go ahead, we're ready.

Hi, good afternoon, and good morning, everyone. Once again, welcome all to QIC Group's quarterly earnings call. We're pleased to report the financial highlights for QIC Group for the first 6 months of this year. The key highlights of the year are as follows: QIC Group reported a net profit of QAR 383 million for H1 2025 against a net profit of QAR 360 million for last year with a 6% quarter-to-quarter growth in net profits. The gross written premium for the period stood at QAR 5.7 billion with a 17% overall increase compared to previous year. The insurance revenue was QAR 4.1 billion and the insurance service expenses were QAR 2.9 billion and the overall insurance service results stood at QAR 221 million. The group's reported net investment and other income was QAR 496 million for the period with an investment yield of 5.2%. The overall operating and administrative expenses remained flat as at Q1 2025. The regulatory solvency ratio for the group stood stable at 185%. Now going on to the details. The results for the first 6 months continue to reflect the consistent and stable bottom line focused growth story of QIC for the past 2 years. Against global market shocks and uncertainties, QIC continued to deliver strong financial results and builds resilience with positive earnings across all its key 3 verticals, that is regional, international operations and asset management operations with robust profits of QAR 383 million during the year. The net profits will be at 17% year-on-year at QAR 420 million without the impact of the Pillar 2, which is effective from January 1, 2025. Now moving on to the other key aspects. With the evolution of our underwriting portfolio mix, which we initiated a couple of years back, we have now achieved the desired target of a well-balanced and well-diversified portfolio mix. The regional gross written premium increased to QAR 3.4 billion in H1 2025, up 23% quarter-on-quarter, while the gross written premium from our international operations grew at 9% to reach INR 2.3 billion. QIC, as you're aware, like -- unlike most of the other regional payers, which has a risk concentration geographically in the domains where they operate, QIC has a well-diversified and balanced portfolio. Our current book of risks are diversified across 20-plus different lines of business, which is also diversified across the globe geographically. And within the types of business, our focus has always been to the short-tail lines of business, which are predominantly, I mean, personal lines of business. We have set a clear underwriting strategy to focus -- to develop our risk portfolio focused on short-tail business and the risks that can be efficiently marketed and distributed through our leading digitally enhanced top B2C and B2B channels. As you're aware, we also fully exited from all the low-margin and loss-making high severity and high volatile business, which used to write earlier through our international operations. Currently, around 60% of our book is written through our direct regional operations and the remaining 40% through our international operations. Now going further to the operations, I mean, within the region, in Qatar, we continue to be the market leader. While our local competitors try to emulate our heaps in pioneering digital transformation in insurance, we continue to be the market leader across most of the lines of business with focus to the bottom line-driven growth by applying the latest digital and AI techniques in the selection of the risks by applying actuarial GLM pricing models, et cetera. By this approach, we've been able to differentiate with our local providers by launching innovative new products to the market and also providing bespoke customer service through our advanced AI-based CRM tools. Also, as you are aware, UAE is the other important market for us, where we have made major inroads in the recent years. While QIC has been in the market operating for the last 57 years and is one of the most respected corporate names, in the recent years, using our domain knowledge and expertise in the personal digital line fronts, we have made a focused approach to grow in short-tail selected lines of business within UAE. We are currently among the top 5 insurers in UAE and have created a critical mass, which would enable us to leverage and give opportunities for further retail cross-selling opportunities and penetration to the other Emirates within UAE. While Oman and Kuwait operations continue to grow at a slower pace with the strategy set to expand in the region, QIC, as you are aware, has set a plan to expand to the Saudi market as a branch office that's progressing well, and we are in the process of submitting the documentations to the concerned regulatory authorities. Now moving on to the international operations. We have completed -- completely exited from our loss-making and low-margin business a couple of years back. As of now, most of the business we write is through our Lloyd's operation that's Lloyd's Syndicate, which is one among the 84 Lloyd's syndicates part of the Lloyds of London, an [ umbrella ] through which collectively, the Lloyd's writes around GBP 26 billion of premium. Our Lloyd's Syndicate underwrites almost 17 to 18 diversified lines of business, which houses almost 100 specialized underwriters and actuaries. And this team has been consistently delivering profitable underwriting results over the past several years. Now moving on to the figures for the insurance results. The insurance service results for Q1 stood at QAR 221 million. Our IFRS 17 combined ratio as at H1 2025 stood at [ 93.4%, ] which is within our expected target combined ratio. The higher pace of premium growth at the regional operations from 2024 to 2025 compared to '23 and '24 has resulted in recognition of lower insurance revenue and earnings during the initial quarters of 2025. This lower recognition of insurance revenue compared to the higher claims incurred on account of the claim seasonality trend seen at the beginning of the insurance period has resulted in lower insurance income during the reporting period at the regional offices. We expect this to even out as the quarter develops and as we released the premium written during the year. With regard to the international operations, they continue to deliver the stellar performance despite the major global cat events like U.S. wildfires, which is not material for the QIC Group. Now moving on to investments. Investments continue to deliver the stellar performance. And the return on investment came at 5.2%. And the group continues to maintain its high-quality, stable and well-diversified investment portfolio, which is aligned with its long-term strategic and asset -- strategic asset allocation. So this is a broader overview of our H1 2025 results. And do let us know if you have any further queries or clarifications.

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

Thank you. I mean -- so if at all there are any further queries, you can send us to our investment teams, and we are happy to answer them. Thank you all.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.