The shareholders of Arab Insurance Group (Arig) , a leading insurance and reinsurance  company based in Bahrain, yesterday voiced their concerns over the company's performance during their annual general meeting.They were particularly worried about the insurance and reinsurance company's failure to pay yet again a dividend in spite of the fact that the company had made a profit.Last year, Arig  posted a net profit of $15.3 million, compared to a net loss of $19.1 million in 2011, reported the Gulf Daily News, our sister publication.Following the meeting, chief executive Yassir Albaharna declined to comment on the debate, which was held in Arabic, but a spokeswoman for the company said the chairman, Khalid Ali Al Bustani, had clarified the reasons for the dividend decision."The low interest rate regime, which is expected to last for some time, is starting to change the face of the reinsurance market," Albharna said in the group's annual report."Reinsurers typically need a generous capital cushion to protect themselves against extreme loss events, particularly if they intend to write catastrophe risks where exposures are on the increase as a result of rising values and the effects of global warming. Previously, that made good commercial sense as industry leaders managed to deliver return on equities ranging between 15 per cent to 25 per cent," he stated."But with investment income down, 8.5 per cent has become the new 25 per cent," he pointed out."What we are finally about to witness is the convergence between the financial markets and reinsurance," he said."Tapping funds, that are measured in tens of trillions, will ensure that the expected effects of any future mega catastrophe or the increased capital requirements under the Solvency II regime can be met with relative ease. So from the capital side, reinsurers may look into the future with confidence," observed Albharna."Yet, in order to attract investors to a particular portfolio, there needs to be a track record of returns that pass investors' scrutiny. This is where it could become complicated: while a greater influx of capital funds could drive down rates, a certain minimum profitability must be achieved to keep investors interested," said the top official."Our focus remained firmly set on the quality of our portfolio," he added."We would rather walk away from under-priced accounts than write future losses. In the Far East, we discontinued a number of personal accident quota share arrangements whereas in the Mena region, premium was reduced in the aftermath of the political turmoil in parts of North Africa and sanctions effective for Iran, Syria and Sudan, said Albharna."There was a territorial shift in our search for the most attractive markets as the volume of premium produced from the Middle East and Far East reduced by 1 per cent and 6 per cent respectively, and the size of the business generated from the London Lloyd's market increased by 6 per cent of total," he explained."Even though the Lloyd's market suffered catastrophe losses from underwriting years 2010 and 2011, we still regard it as an attractive source of business that should earn its reinsurers good returns over time, as history has shown," he added.