ADNIC reports net profit of AED 204.4 million in H1 2023
16 Aug 2023
Abu Dhabi National Insurance Company (ADNIC), one of the leading regional multi-line insurance providers for both corporates and individuals, reported its financial results for the six-month period ended 30 June 2023. For the six-month period ended 30 June 2023, ADNIC recorded a net profit of AED 204.4 million.
Commenting on ADNIC’s performance, Sheikh Mohamed Bin Saif Al-Nahyan, Chairman of ADNIC, said: “ADNIC has had a strong start to the year with an Insurance Revenue of AED 2.14 billion. As we continue to successfully unwind our dependence on heavily reinsured corporate programmes, our underwriting profitability continues to be robust with a combined ratio of 87.60% and a net insurance service profit of AED 178.1 million. The tailwind of higher interest rates and modified asset allocation positively impacted investment income, where our Total investment income for the period amounted to AED 110.8 million.”
“We continue to invest in technology and operational efficiency across our entire value chain. These investments in key areas will enable more cost-effective and faster policy servicing and have a positive impact on our operations and facilitate sustainable growth. By embracing cutting-edge technology and innovative solutions, we aim to enhance our customers' experiences, increase efficiency, and remain adapted to market dynamics.”
“Sustainability is deeply ingrained in our core values, shaping the foundation of our business approach. We are currently revamping our strategy to steer the company towards a new era of sustainable practices that will benefit both our customers and the communities we serve substantially.”
Total Insurance revenue
For the six-month period ended 30 June 2023, ADNIC's total insurance revenue stood at AED 2.14 billion, compared to AED 2.24 billion for the same period in 2022. We continue to successfully reduce our relative exposure to highly reinsured corporate insurance programs and focus instead on maintaining and developing portfolios with strong underwriting income contribution potential.
Net insurance service result
For the six-month period ended 30 June 2023, ADNIC's net insurance service result stood at AED 178.1 million, against AED 196.4 million for the same period in 2022. This is aligned with the current stage of our financial planning and financial reporting transition necessary due to the new IFRS17 standard requirements.
Net Income from investment
ADNIC's net income from investment increased by 78.57% to AED 110.8 million for the six-month period ended 30 June 2023, compared to AED 62.0 million for the same period in 2022. This growth can be attributed to several key factors, including higher interest and coupon incomes, due to strategic changes made in asset allocation in the prior year, as well as mark-to-mark market gains.
Other operating expenses
Other operating expenses for the six-month period ended 30 June 2023 stood at AED 81.5 million, compared to AED 77.7 million for the same period in 2022. This reflects our commitment to the investments required to deliver our digital transformation strategic initiatives.
Profit for the period
The consolidated outcome of all of the above major financial streams for the six-month period ended 30 June 2023, is a Profit for the period increase of 15.46% to AED 204.4 million, compared to AED 177.0 million for the same period in 2022. We remain confident and committed that this strong trend will continue for the remainder of the year.
Charalampos Mylonas, CEO of ADNIC, said: “We were the first amongst our peers to successfully implement IFRS 17 Insurance Contracts (IFRS 17) as of 1 January 2023. This has led to substantial transformations in the accounting of insurance and reinsurance contracts and we remain well ahead of the curve in understanding the long term business implications whilst we continue to graduate our operational rhythm towards this new order. As we continue to navigate the evolving economic landscape in the second half of the year, our focus remains on continuing to invest in our core business lines and digital capabilities.”
He added: “Beyond our core business objectives, ADNIC continues to actively engage in community initiatives and support causes that are close to our hearts, both at home and abroad. In the past month alone, we have partnered with the Reach Campaign to support its efforts to combat neglected tropical diseases (NTDs), and with Emirates Nature-WWF for the third consecutive year to support their mission to build a future where people and nature can thrive.”
