With a great sense of pleasure, pride and privilege I present to you the Annual Report for financial year ended 31 December 2020.
First and foremost, I would like to thank our founders, shareholders and all Insurance House staff, 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.
Despite 2020 being a game-changing year for everyone due to Covid-19, Insurance House registered a Net Profit of AED 10.89 million, compared to AED 16.17 million in the previous year. Considering the upheavals endured during the course of the year, this is a resilient performance that provides a solid foundation for sustained profitable growth in the near future.
Gross Premiums Written during 2020 weighed in at AED 217.37 million, compared to AED 235.82 million written during the previous year. Net Premiums Earned in 2020 were slightly lower at AED 150.17 million, compared to AED 153.13 million in the previous year. At the same time, Net Claims Incurred during 2019 were flat at AED 84.21 million, compared to AED 84.41 million in the previous year. As a combined result of the above, Net Underwriting Income for 2020 was lower at AED 47.00 million, compared to AED 51.57 million registered during the previous year.
Despite volatile equity, fixed income and real estate markets, overall Investment Income from a carefully managed and well-diversified investment portfolio was maintained at AED 6.81 million in 2020, compared to AED 6.89 million in the previous year. Cash & cash equivalents including fixed deposits with UAE banks as of 31 December 2020 stood at a robust 26.4% of Total Assets (2019: 22.4%), highlighting our conservative approach to investments & liquidity management under volatile market conditions, as well as the sound liquidity position of the Company.
General & administrative expenses were lower at AED 42.95 million, compared to AED 43.80 million in the previous year. Several expense rationalization and expense reduction measures have been initiated and the full year impact of these measures will be realized in 2021.
Another key highlight of the year 2020 is that the investment grade credit rating of the Company- Long-Term Issuer Credit Rating of “BBB-” and a Financial Strength Rating of “B+” (Good) have been reaffirmed in Q4 2020 by AM Best, the international credit rating agency. The outlook assigned to these Credit Ratings is “Stable”. This independent re-affirmation of our investment grade credit rating by an international credit rating agency such as AM Best will not only strengthen our existing business relationships, but will also open doors to many new relationships across the globe.
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, their continuous passion that puts us ahead of the market;
- 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
April 12, 2021