Insurer Adnic doubles income for first quarter

11/05/2017 07:34 AST

Profit at Abu Dhabi National Insurance Company (Adnic) nearly doubled during the first quarter, even as premiums remained basically flat.

The insurer, the UAE's third-largest by gross written premiums, reported a net profit of Dh74 million for the three months to the end of March, 90 per cent higher than for the same period in 2016.

Gross written premiums for the quarter compared with the same period last year rose 2 per cent to Dh1.08 billion. Net underwriting profit, meanwhile, rose 46 per cent to Dh97.6m. Adnic returned to profit last year after shifting its focus away from low-margin price-based competition with other insurance providers, increasing premiums across its medical and motor portfolio.

"Our selective approach to underwriting has resulted in a modest increase in premium for the period, but has continued to boost the overall capitalisation of the company and the performance of our portfolio," said Ahmad Idris, Adnic's chief executive.

Listed insurers in the UAE reported a combined net income of Dh906m in 2016 compared with a Dh154m loss in 2015, according to S&P. The ratings agency noted, however, that much of the return to profit was due to an 85 per cent gain in investment income, rather than a growth in premiums.

Adnic shares are among the least liquid on the Abu Dhabi Securities Exchange, with no trades in the stock in more than a month. The company's stock has gained 16.3 per cent so far this year, compared with an average gain of just 0.8 per cent for Abu Dhabi's headline index.

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