BKIC profit rises despite tough market conditions

01/03/2011 00:00 AST

In spite of the more difficult and competitive market conditions, Bahrain Kuwait Insurance Company (BKIC) managed to increase profit marginally last year, up from BD4.1 million ($10.9m) in 2010 compared to BD4m the previous year.

"The company still maintains its leadership in Bahrain's market, and the profit for 2010 has been the best ever since the company started its operations," said chairman Abdulla Hassan Buhindi, speaking at the company's annual general meeting at the Crowne Plazza Hotel yesterday.

The meeting approved the distribution of a cash dividend of 35pc representing 35 fils per share.

Mr Buhindi said that the company has achieved a return on shareholder's fund of 15 per cent for the year.

Shareholder's equity registered an increase of 12pc from BD24.4m in 2009 to BD27.4m last year.

The liquid funds have increased from BD25m to BD28m and earnings per share increased from 62 fils to 64 fils.

The board has approved the business plan, which the company formulated for three year period from 2011 to 2013 which includes the introduction of new products and increased distribution channels and improved service quality.

Mr Buhindi said the company has recently completed purchase of a new 11-storey building in Seef District to serve as the head office of the company while the present building which is located in Diplomatic area will remain within the company's investment portfolio.

Chief executive officer Ebrahim Al Rayes said the company had achieved an increase of 5pc in the gross premium revenue from BD31.8m in 2009 to BD33.4m.

"This year our company signed a memorandum of understanding (MoU) with Bank of Bahrain and Kuwait to take advantage of their large client base for marketing personal insurance such as motor, home, travel, life and medical.

"We have also embarked on an ambitious reinsurance programme in co-operation with the majority shareholder of the company, Gulf Insurance Company, and its subsidiaries with the aim of increasing retained premium and commission income.

"The changes were broad based in nature and included proportional and non-proportional treaties across all classes of business. This arrangement is first of its kind in the region."

Mr Al Rayes predicted that the oil prices will remain at the current high level in the short and medium terms. Consequently, the developmental process is expected to continue in the region and have a positive impact on insurance activities.

"Growth in the insurance sector is largely dependent on growth in the economy in general," he added. "I would expect us to see growth in our business this year of between 5 to 7.5pc.

Gulf Daily News