With a great sense of pleasure, pride and privilege I welcome you all on behalf of the Board of Directors, at the seventh Annual General Meeting of Insurance House PSC.
First and foremost, I would like to thank our founders, shareholders and all those who helped further develop and grow Insurance House into the enterprise it is today, one that is focused on exceeding customers’ expectations and maximizing shareholders’ wealth.
During 2018, IH has maintained a steady improvement in its overall performance by registering a Net Profit of AED 10.64 million for the year ended 31 December 2018, which is 28.9% higher than the Net Profit of AED 8.12 million registered in the previous year. This augurs well for sustained profitable growth in the near future.
Systematic selection of underwritten risks and overall softening of the insurance market in the UAE, resulted in slightly lower Gross Premiums Written of AED 210.88 million during 2018 compared to AED 219.47 million logged during the previous year. However, Net Claims Incurred during 2018 registered a dramatic but healthy drop of 20.84% to AED 84.44 million compared to AED 106.67 million during the previous year. This is a direct result of a series of strategic and tactical measures implemented by IH Management to lower cost of Claims Incurred across all business lines. The ratio of Net Claims Incurred as a percentage of Net Premiums Earned, registered a remarkable improvement to 56.9% in 2018 compared to 67.6% in the previous year. As a result of the above, Net Underwriting Income for 2018 jumped by 24.2% to AED 45.75 million compared to AED 36.85 million registered during the previous year.
Despite intense competition, softer market conditions and elevated pressures on input costs, the Company was able to register a year on year improvement of 28.9% in its Net Profit, through well thought out strategies and their effective implementation across all business lines. Going forward, it will be our endeavor to build on this significantly improved performance of the previous two years viz. 2017 & 2018.
Investment Income earned during 2018 rose to AED 4.36 million compared to AED 2.89 million in the previous year. Cash & cash equivalents as of 31 December 2018 stood at a robust 19.4% of Total Assets, highlighting the sound liquidity position of the Company.
During the year 2018, we further expanded our customer reach within the UAE through the addition of two new branches- one in Deira, Dubai and the other inside Muroor, Abu Dhabi. This brings our total branch network in the UAE to 8 branches, in addition to the Abu Dhabi head office.
General & administrative expenses are higher than the previous year but in line with our expenditure budget for 2018. We continue to maintain a close vigil to ensure that expenses are on a tight leash. From IT Systems and Operational perspectives, the Company smoothly transitioned to the new UAE VAT regime effective 1 Jan 2018. Other Operational Expenses for 2018 include a sizeable one-off expenditure of AED 2.96 million on account of Output VAT payable to FTA that was not recoverable from customers as per the UAE VAT Legislation.
Our strategy is to compete on the basis of differentiated product offerings, improved digital capabilities and superior service quality. Going forward, profits from core insurance activities will be driven by continuous fine-tuning of our risk underwriting capabilities, increased use of digital channels to extend customer reach and enhanced controls in our claims management processes.
With Appreciation & Gratitude
I take this opportunity to acknowledge and place on record my sincere appreciation & gratitude to:
- our loyal customers for their continued patronage and constructive feedback,
- the UAE Insurance Authority, the UAE Ministry of Economy, the Securities and Commodities Authority, the Abu Dhabi Department of Economic Development and the Abu Dhabi Securities Exchange for their continued guidance and valuable support,
- our shareholders for their unwavering confidence and patience,
- our management and staff for their commendable teamwork, positive attitude, dedication to duty & untiring efforts and,
- fellow Board members for their pro-active guidance and valuable inputs.
We express our sincere gratitude to the Government of the UAE under the visionary leadership of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai, His Highness General Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces as well as Their Highnesses, the Rulers of various Emirates and Supreme Council Members for their progressive leadership.
On behalf of the Board of Directors,
Mohammed Abdulla Jumaa Alqubaisi