Arig goes into run-off
The Extraordinary General Meeting of Arab Insurance Group (B.S.C) [Arig] was held recently according to which the Board had approved the cessation of further underwriting of reinsurance business. The Board has been authorised to carry out an orderly run-off of the existing portfolio internally or by appointing a third party to carry out the run-off including sale of portfolio, according to a bourse statement. The Board has also decided to explore the possibility of finding a buyer to take over the company while under run-off. Arig recorded a consolidated net loss of USD3.1 million for the six months 2020 (six months 2019: net profit of USD9.2 million), mainly due to investment losses. Comprehensive income attributable to shareholders for the six months 2020 was a loss of USD4.8 million (six months 2019: profit of USD20.5 million).
Arig’s shareholders’ equity stood at USD223.5 million at 30 June 2020 (end of 2019: USD228.4 million) a decrease of two percent. Accumulated losses of the Company stood at USD31.5 million at the period-end (end of 2019: USD28.5 million), representing 14.3 percent of paid-up capital. The total assets at 30 June 2020 was USD888.8 million compared to USD1,035.8 million at the end of December 2019, a reduction of 14 percent.
The Group reported negative gross premiums of USD12.6 million for the six months of 2020 due to net write-off of pipeline premiums (six months 2019: USD171.7 million). Consolidated investment income attributable to shareholders and insurance funds for the six months was a loss of USD1.7 million (six months 2019: profit USD17.3 million) as a result of market volatility. Arig’s underwriting result was a loss of USD0.8 million for the six months 2020 (six months 2019: profit USD12.5 million) due to investment losses on policyholders’ funds. Losses from reinsurance operations (underwriting result before investment income) produced a loss of USD471 million over the past twenty years ending 31 December 2018. After considering investment income allocated to reinsurance, the loss is around USD225 million over the past 20-year period, according to a statement.
