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May 17, 2014
Mr. Murad Ali Murad, Chairman of Bahrain Kuwait Insurance company (BKIC) announced that the company's net profit for the Q1 increased from BD 914,000 last year to BD 1.9 Million this year.
He stated that Technical profits (core business) decreased by 7% over the quarter under study, from BD 611,000 in year 2013 to BD 569,000 in the current year, mainly due to provision of additional reserves for claims incurred but not reported (IBNR).
Mr. Murad added that the company has recorded extraordinary profits from the sale of investment property located in Diplomatic area. The decision to sell the property was however taken two years ago when the BKIC moved its operations to the new location in Seef District. Owing to this transaction, investment income in the 1st Quarter of current year reached BD 1.6 Million as against BD 492,000 earned in the same quarter last year. This was despite provision of additional reserves amounting to BD 363,000 for impairment in value of old investments, whereas the figure stood at BD 17,000 only for the corresponding period last year. Furthermore, the company has taken additional reserve valued at BD 70,000 towards provision for bad and doubtful debts.
Shareholders' equity increased by 1%, from BD 33.3 Million at the end of last year to BD 33.7 for the end of Q1 this year. Return on shareholders' equity for the first quarter of current year is 5.6% as against 3.1% for the same period last year. Earnings per share over the 1st Quarter of year 2014 reached 27 Fils, as compared to 13 Fils for corresponding period last year. Technical reserves increased by 5% from BD 13.6 Million and the end of last year to BD 14.2 Million for the end of Q1 this year.
Mr. Ebrahim Al Rayes, C.E.O. of BKIC added that the premium increased marginally by 1%, from BD 9 Million for the 1st quarter of last year to BD 9.1 Million for the same period this year, mainly due to severe competition in the market. However, he observed that the intensity of competition encouraged the company to upgrade its services to the insuring public, and thus maintain the leading position in the Bahrain market. He said that the company will continue to harvest the good will built over the years and closely monitor its services in order to maintain the position.
Mr. Al Rayes said that the management hopes that the coming period will be better with regard to both the business volumes as well as profitability. He added that the company has formulated an ambitious business plan for the next few years which involves targeting of profitable business segments in order to further improve the return to the company's shareholders.