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 nine months ended 30^th September 2023

The financial results for the third quarter of the year 2023 (Q3-2023)

The consolidated financial results for Q3-2023 presented a net profit attributable to the shareholders of BD 1.184 million compared to BD 0.966 million for the same period last year, representing an increase of 23%. Earnings per share during the three months of the current year were 8 fils compared to 6 fils for the same period of last year. The total comprehensive income attributable to the shareholders reached BD 0.855 million in Q3-2023 compared to BD 0.763 million in Q3-2022, registering an increase of 12%. The increase was mainly due to increased fair value gains recorded in the 3rd quarter 2023 compared to the same period in 2022.

The Company achieved 14% growth in Insurance revenue, from BD 24.863 million in the 3^rd quarter of last year to BD 28.267 million in the 3^rd quarter of the current year. The Insurance service results increased by 75%, from BD 0.590 million in the 3^rd quarter of last year to BD 1.032 million in the 3^rd quarter of the current year. The Total investment income increased by 9%, from BD 0.833 million in the 3^rd quarter of last year to BD 0.912 million in the 3^rd quarter of the current year.

The financial results for the nine months ended 30^th September 2023

The consolidated financial results for the nine-month period ended 30^th September 2023 presented a net profit attributable to the shareholders of BD 3.962 million, compared to BD 4.522 million (reinstated) of the same period last year, representing a decrease of 12%. Earnings per share were 27 fils during the current period compared to 30 fils of the same period last year. The total comprehensive income attributable to the shareholders was BD 3.386 million compared to BD 2.589 million for the same period last year, registering an increase of 31%.

The company achieved 5% growth in gross premium revenue of BD 74,837 million during the nine months of this year, compared to BD 71.178 million in the first nine months of last year.

The Insurance service result decreased by 14%, to BD 3.016 million in the nine months of this year compared to BD 3.511 million in the same period last year. The net investment income increased by 31%, from BD 2.666 million in the nine months of last year to BD 3.505 million in the same period of this year.

Despite growth in premiums and significant improvement in investments performance, the company's net profit has declined compared to the previous year. This decline is primarily due to the change of IFRS17 discounting rate used in 2022 when reinstating the financials, which resulted in a one-time exceptional increase in profit for that period in 2022.

The total shareholders’ equity as at end of September 2023 is BD 41.994 million compared to BD 42.484 million as at end of last year, representing a decrease of 1% mainly due to allocation towards increased shareholders’ dividends payouts. The total assets by the end of September 2023 reached BD 159.889 million compared to BD 149.875 million as at end of last year, representing an increase of 7%. The net Insurance contract liabilities increased from BD 56.232 million at the end of the last year to BD 61.662 million at the end of the current period, registering an increase of 10%.  

Board of Directors’ Comments

While reviewing the results of the company, the Board of Directors expressed their satisfaction stating: “The Board of Directors is pleased with the results for the first nine months of 2023 as the company was able to achieve this result despite challenging new projects being implemented in 2023. The Board keenly monitors the significant progress made by the company in the implementation of IFRS 17 and new core application projects and recognizes the hard work and dedication of the Management and employees of the company.

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.

Once again, the Board would like to reiterate to its shareholders the news announced in April 2023 regarding the potential change in the shareholding structure of the company’s Parent, Gulf Insurance Group (GIG) after Kuwait Projects Company Holding (KIPCO) received a binding purchase agreement from FairFax Financial Holding Company Limited to sell the entire share of KIPCO in the GIG totaling 46.32% to FairFax after obtaining the required approvals of the relevant regulatory authorities.”

The Company showed its commitment to the national humanitarian campaign “help Gaza” by contributing to the relief aid which reflects part of the company’s corporate social responsibilities. 

Chief Executive Officer’s Comments

BKIC’s CEO Dr. Abdulla Sultan commented that the company’s consolidated results in the first nine months of 2023 are satisfying.  He commented that significant improvement in investment income this year enables the company to be conservative in provisions and technical reserves.

He commented that “We would also like to remind our shareholders that the company adopted completely new accounting standards in 2023 (IFRS 17) which resulted in a 9-month net profit of BD 3.962 million while last year’s audited financials based on IFRS 4, showed a 9-month net profit of BD 3.501 million. The new accounting standards were put into effect on 1/1/2023 and the company had to reinstate its 2023 financials to reflect IFRS17 for comparison purposes. It is worth mentioning that the assumptions applied in 2022 differed greatly from those currently applied as these new standards are a learning experience and the company continues enhancing its assumptions to become more conservative in 2023. The gap between IFRS 17 net profit compared the same period last year, narrowed to BD 0.560 million compared from the position of the first nine months, due to fine tuning of the assumptions as the standard is still evolving.”

He further commented that AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Bahrain Kuwait Insurance Company B.S.C. (BKIC). The outlook of these ratings is stable. He added that the company has an excellent record of profitability reflecting excellent underwriting performance for various types of insurance in Bahrain and Kuwait. He also quoted that BKIC and its subsidiary Takaful International Co. are the only local Bahraini insurance companies to be rated A-.

The Company continues to lead in the Bahraini market which enables the company to strive for new initiatives to serve the customers better.

Group Profile

It is worth mentioning that Bahrain Kuwait Insurance Company (BKIC) is the lead insurance company in the Bahraini 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, Syria, Iraq and Lebanon.

KIPCO – Kuwait Projects Company – is Gulf Insurance Group’s largest shareholder, followed by the Canadian-based Fairfax Financial Holding Ltd. 

The full set of financial statements and the press release for the period ended 30^th September 2023 are available on the websites of Bahrain Bourse and Boursa Kuwait.