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March 20, 2016
The General Assembly of Bahrain Kuwait Insurance Company approved at their meeting held at BKIC Headquarter in Seef District, Kingdom of Bahrain on Sunday, 20th March 2016, a cash dividend of 30% (BD 2,145,000) of the paid up capital to the shareholders.
Mr. Murad Ali Murad – the Chairman of the Company presents in his report the company's milestones during the past four decades coincide with the 40th anniversary of the founding of Bahrain Kuwait Insurance Company. He also stated that the insurance market in Bahrain suffers from several challenges, resulting in mostly unhealthy competition among insurance companies in the local market and because of the flexibility by the reinsurers in terms of coverage and prices.
Mr. Murad also mentioned in his report about the economic and political situation in Bahrain and said that low oil prices are still an obstacle for all the sectors in the Kingdom of Bahrain, including the insurance sector. On the other hand, the Kingdom of Bahrain has achieved more stability during the year, which has had a positive impact on various economic and social activities; Bahrain hosted during the year many exhibitions, conferences and sports events that have provided impetus for tourism in the country.
On the investment side, the company has in the second quarter of this year, entered into a strategic investment to buy nearly 41% of the shares of Takaful International Company in Bahrain, the third largest company in terms of gross written premium, which will enable it to meet the growing demand for Takaful insurance products.
With regard to the credit rating, he stated that the international rating agency A.M. Best has affirmed the credit rating of the company “A- with stable outlook” after a review of the company’s operations during the year 2015. This rating reflects the company’s ability to meet all its financial obligations comfortably.
Mr. Ebrahim Alrayes – the CEO said that despite the decline in the gross premium revenue by 4%, from BD 39.8 million in 2014 to BD 38.1 million in 2015, technical profit increased by 2.5%, from BD 2.96 million in 2014 to BD 3.05 million in 2015. The net income from investment at the end of the period stood at BD 1.1 million compared to BD 2.2 million in 2014 due to the exceptional profits achieved by the company in 2014 from the sale of investment property. This affected the overall net profit, which decreased from BD 4.2 million in 2014 to BD 2.7 million in 2015.
In the field of business development, Mr. Alrayes stated that the company developed an automated system to upload the vehicle information on the General Directorate of Traffic e-Gov. portal at the time of insurance from any insurance center. Also, an IT system was developed to enable the Brokers to issue travel policies directly from their premises and hand them over to their customers on the spot. Further, various promotional campaigns were launched in 2015 aiming at increasing the awareness of the various products and services.
About the outlook for the year 2016, Mr. Alrayes said that falling oil prices will throw various challenges at insurance companies in the region in general and Bahrain in particular; given the fact that oil sector is the major driver of the economy. We expect that the Governments may exert more pressure on controlling of expenses and revenue spending. They may reduce the spending budget of service industries and postpone some projects. This will increase competition and put more pressure on prices. We hope that the private sector will play a bigger role in stimulating the economy in the coming period.