BKIC approves 30pc cash dividend payout

21/03/2016 08:04 AST

Shareholders of Bahrain Kuwait Insurance Company (BKIC) will receive a cash dividend of 30 per cent (BD2,145,000) of the paid-up capital, it has emerged.

The dividend proposal was approved by shareholders during their annual general meeting at the company's headquarters in Seef yesterday.

Chairman Murad Ali Murad said the current year marks the 40th anniversary of the founding of BKIC. He also said the insurance market in Bahrain suffers from several challenges, resulting in mostly unhealthy competition among insurance companies in the local market and because of the flexibility by the reinsurers in terms of coverage and prices.

Mr Murad also told shareholders that the economic and political situation in Bahrain and low oil prices are still an obstacle for all the sectors in Bahrain, including the insurance sector.

However, he said the kingdom has achieved more stability during the year, which has had a positive impact on various economic and social activities.

"Bahrain hosted during the year many exhibitions, conferences and sports events that have provided impetus for tourism in the country," he added.

On the investment side, the company last year entered into a strategic investment to buy nearly 41pc of shares of Takaful International Company in Bahrain, the third largest company in terms of gross written premium, which will enable it to meet the growing demand for takaful products.

He said international ratings agency AM Best has affirmed the credit rating of the company at A- with stable outlook after a review of its operations last year.

The rating reflects the company's ability to meet its financial obligations comfortably, Mr Murad added.

Chief executive Ebrahim Alrayes said despite the decline in the gross premium revenue by 4pc from BD39.8m in 2014 to BD38.1m last year, technical profit increased by 2.5pc from BD2.96m in 2014 to BD3.05m.

The net income from investment at the end of the period stood at BD1.1m compared with BD2.2m in 2014 due to the exceptional profits achieved by the company in 2014 from the sale of investment property.

This affected the overall net profit, which decreased from BD4.2m in 2014 to BD2.7m last year. About the outlook for the current year, Mr Alrayes said falling oil prices will throw various challenges at insurance companies in the region in general and Bahrain in particular; given the fact that oil sector is the major driver of the economy.

"We expect that the governments may exert more pressure on controlling of expenses and revenue spending. They may reduce the spending budget of service industries and postpone some projects."

This, he said, would increase competition and put more pressure on prices. "We hope that the private sector will play a bigger role in stimulating the economy in the coming period."

Gulf Daily News