Bahrain-based Arab Insurance Group (Arig) said on Tuesday that it made a net loss of $15.6 million in the first six months of 2000 compared with a $4.7 million profit in the same period last year, reported Khaleej Times newspaper.
"Continuing difficult conditions in the reinsurance markets and extreme volatility in global financial markets have led to Arab Insurance Group reporting a net loss of $15.6 million for the half year," Arig said in a statement.
Investment income in the first half of 2000 fell sharply to $8.9 million from $25.7 million in 1999, said the paper.
This was mainly due to capital losses in its subsidiary Compagnie Nord-Africaine Intercontinentale d'Assurance (CNIA), the statement said.
Arig, which made a net loss of $98 million in 1999, has a 67 per cent stake in the Moroccan-based CNIA.
The company said extremely unfavorable reinsurance market conditions seen over the last few years had persisted in 2000.
"With 1999 turning out to be one of the worst years on record for the frequency of natural disasters, reinsures' difficulties were heightened by the absence of any significant premium rate increases," the statement said.
It said with the full impact of the December 1999 European storms being felt in 2000, the results of many reinsurers were likely to be affected during the year. The market would remain soft and continued to present difficulties.
"Significant improvement is not expected before 2001," Chairman Nasser Al Nowais said in the statement.
"However, by taking a long-term view, focussing on new business opportunities and expanding in our core Afro-Asian and Arab markets, the group's reinsurance business is prepared to take advantage of improvements when they do occur," he said.
"Arig has also effected changes in underwriting policies to minimize the impact of the current market conditions," he added without elaborating.
Combined gross premiums fell to $161.7 million at the end of June, 2000, from $195.9 million the previous year.
Kuwait, the United Arab Emirates and Libya each hold a 16.3 per cent stake in Arig, whose shares are traded on the Bahraini, Omani, Kuwaiti and Egyptians bourses. Its global depository receipts are listed on the London Stock Exchange, the paper said - Albawaba.com
© 2000 Al Bawaba (www.albawaba.com)
