Bahrain-based Arab Insurance Group (Arig) has reported a net profit of $15.6m for 2014, down from $18.6m in 2013, on gross written premiums (GWP) of $315.3m, up from $262.0m. The underwriting result fell to $6.0m, from $13.4m the previous year.
The Islamic reinsurance section (Takaful Re) recorded a loss of $4.9m, compared with a loss of $4.4m the previous year. The conventional reinsurance side of the business booked a gain of $20.5m, down from $24.0m in 2013.
Conventional business comprises 94% of the group's premiums. The conventional business combined ratio for the year was 97.8%, while Takaful Re had a combined ratio of 147%, pushing the group's combined ratio for the year above 100%, to 101.7%.
Arig chief executive Yassir Albaharna said: "The majority of Arig's reinsurance portfolio performed well in a challenging market where we have seen risk premiums reducing year by year. Apart from the underwriting result, we are pursuing a strategy that protects our stakeholders' capital".
However, the long-term strain imposed by Takaful reinsurance is showing. The CEO said that "in spite of the measures taken in the past, Takaful Re continues to be a drag on the Group's performance". He said that the group was "currently engaged in active discussions to decide on a solution that would safeguard the future profitability of our Re-Takaful interest".