Bahrain Kuwait Insurance Company (BKIC) B.S.C. (trading code in Bahrain Bourse “BKIC” and in Boursa Kuwait “BKIKWT”) announced its consolidated financial results for the year ended 31^st December 2023.

The financial results for the fourth quarter of the year 2023 (Q4-2023)

The consolidated financial results for Q4-2023 presented a net profit attributable to the shareholders of BD 1.043 mio compared to BD 1.162 mio (restated) for the same period last year, representing a decrease of 10%. it is important to note that these figures are based on the new accounting standards, IFRS17, which the company has successfully adopted, making it the first company in Bahrain to do so. The financial results for 2023, based on the new IFRS17 standards, indicate a decline compared to last year's restated results. This decline is primarily attributed to changes in accounting assumptions which resulted in a one-time exceptional increase in 2022 restated results. While this has impacted on the current year's figures in comparison to last year’s restated figures, it is important to note that the 2023 adjustments made reflect a more accurate representation of the financial performance going forward.

Earnings per share during the three months of the current year were 7 fils compared to 8 fils (restated) for the same period of last year. The total comprehensive income attributable to the shareholders reached BD 2.201 mio in Q4-2023 compared to BD 1.899 mio in Q4-2022, registering an increase of 16%. The increase was mainly due to increased fair value gains recorded in the 4^th quarter 2023 compared to the same period in 2022.

The Company achieved 11% growth in Insurance revenue, from BD 26.886 mio in the 4^th quarter of last year to BD 29.888 mio in the 4^th quarter of the current year. The Insurance service results decreased by 74%, from BD 1.111 mio in the 4^th quarter of last year to BD 0.291 mio in the 4^th quarter of the current year. The Total investment income increased by 180%, from BD 0.382 mio in the 4^th quarter of last year to BD 1.070 mio in the 4^th quarter of the current year.

The financial results for the year ended 31^st December 2023

The consolidated financial results for the year ended 31^st December 2023 presented a net profit attributable to the shareholders of BD 5.005 mio, compared to BD 5.684 mio (restated) of the same period last year, representing a decrease of 12%. Earnings per share were 34 fils during the current period compared to 38 fils (restated) of the same period last year. The total comprehensive income attributable to the shareholders was BD 5.588 mio compared to BD 4.488 mio for the same period last year, registering an increase of 24%.

The company achieved 3% growth in gross written premium of BD 107.673 mio during this year, compared to BD 104.262 mio in the last year. Insurance revenue increased by 8% from BD 101.926 in the last year to BD 109.988 mio in the current year. The Insurance service result decreased by 28%, from BD 3.307 mio in this year compared to BD 4.622 mio (restated) in the last year. The net investment income increased by 50%, from BD 3.048 mio in the last year to BD 4.575 mio in this year. 

The company has shown growth and significant improvement in investments performance. However, the decrease in net profit compared to the previous year is primarily attributed to the implementation of the new accounting standard (IFRS17). This standard introduced discounting for the first time, along with changes in accounting assumptions during the restatement of financials in 2022, which led to a one-time exceptional increase in profits that year. Additionally, the company is actively working on strengthening its reserves and provisions in 2023 for the uncertainties related to this new standard, which also impacts the net profit.

The total shareholders’ equity as at end of December 2023 is BD 44.229 mio compared to BD 42.484 mio (restated) as at end of last year, representing an increase of 4%. The total assets by the end of December 2023 reached BD 171.471 mio compared to BD 149.875 mio (restated) as at end of last year, representing an increase of 14%. The net Insurance contract liabilities increased from BD 56.230 mio (restated) at the end of the last year to BD 62.491 mio at the end of the current year, registering an increase of 11%.

Board of Directors’ Comments:

Commenting on the company’s results, the Board of Directors expressed their satisfaction stating: “The Board of Directors is pleased with the results for the year ending 31/12/2023 as the company was able to achieve this result despite facing challenging new major changes including the implementation of the new core system and the adoption of new accounting standards (IFRS9 and IFRS17) in 2023. The Board is pleased with the first-time implementation of IFRS 17 and new core system which were launched in 2023. The Board recognizes the hard work and dedication of the Management and employees of the company. The Board is also pleased with the achievements implemented on the new strategy cycle 2023-2025 and looks forward to further progress in the coming years.

The support and confidence reposed by the BKIC’s customers and business partners and the impeccable commitment and dedication of both management and employees enables the company to produce satisfactory results and scaling newer heights year on year.

It is also worth noting that Fairfax Financial Holding Ltd. has completed the acquisition of KIPCO’s shares in Gulf Insurance Group increasing their shareholding above 90%.

The Board of directors also decided to propose to distribute Cash dividend: 25% equivalent to 25 fils per share amounting to BD 3,726,095 (Excluding the treasury shares). This is subject to the approval of the concerned regulatory authorities and the company’s shareholders at the upcoming Annual General Meeting.

Chief Executive Officer’s Comments:

The company’s CEO, Dr. Abdulla Sultan, confirmed that BKIC’s consolidated full year 2023 Financial results were in line with the budgetary provisions, but he additionally emphasized that the figures once again surpassed the historically highest Gross Written Premium revenue for a local listed Bahraini (direct) Insurance company, crossing BD 107mio. This was also supported by the company achieving historical net profits since its inception (excluding restated 2022 results). To accomplish this feature in 2023, the company acceded to a noticeable growth, maintained an enhanced superior underwriting regimen, resorted to a conservative provisioning mechanism, all of which culminated into a 11.5% return on equity.  

Lastly, to put it in his own words, Dr. Sultan shared that: “The company has performed extremely well in 2023 exploiting prolific operational endeavors which focused on enhanced underwriting, diversified distribution channels, spurred productivity & efficiency, and a prompt dedicated customer service base.  Our subsidiary continuously enhances its value by generating a larger surplus in its funds. The substantial evidence enveloping the 2023 performance showcases and solidifies our continuous role as the leading insurance company in the Bahraini and a major player in the Kuwaiti markets. To secure such an environment, the Board’s support has been exceptional and undivided, which is highly commendable, to say the least.  

There were many achievements to be proud of during 2023. some of which include record revenue and net profits, implementation of IFRS17, Go-Live with our new Core-system, Great Place to Work award, launch of our 1^st Future Development Program, new partnerships with financial services, ongoing assessment and review of cyber threats and practices with the appointment of a dedicated Information Security Officer and also increased our CSR & ESG initiatives. 

With that in mind, I would like to seize this opportunity to thank all staff in Bahrain, in Kuwait, and at the subsidiary for the invaluable effort, dedication, and teamwork. I humbly express my gratitude for your commitment and loyalty which unequivocally have been instrumental in achieving the company’s objectives, looking forward into 2024, I remain confident and optimistic that our 3-year strategy 2023-2025 will witness a successful implementation of what our Board & team committed to.” 

Group Profile

It is worth mentioning that Bahrain Kuwait Insurance Company (BKIC) is the lead insurance company in the Bahrain market and a major player in Kuwait, with a credit rating of A- (Excellent) with stable outlook, by A.M Best which is the highest rating in Bahrain to be awarded to a local direct insurer, reflecting the financial strength of the company to meet its future obligations. BKIC is a subsidiary of Gulf Insurance Group (GIG) which is the largest insurance Group in Kuwait in terms of written and retained premiums, with operations in life and non-life as well as Takaful insurance. Gulf Insurance has become one of the largest insurance networks in the Middle East and North Africa with companies in Bahrain, Kuwait, Jordan, Egypt, Turkey, Algeria, UAE, KSA, Oman, Qatar, Iraq and Lebanon.

Fairfax Financial Holding Ltd. is Gulf Insurance Group’s Major and largest shareholder.

The full set of financial statements and the press release for the year ended 31^st December 2023 are available on the websites of Bahrain Bourse and Boursa Kuwait.