14 Feb 2019

Abu Dhabi National Insurance Company (ADNIC), one of the leading regional multi-line insurance providers both for corporates and individuals, today reported its financial results for the full year ended 31 December 2018. ADNIC delivered a strong set of results, with gross written premiums up by 10.1% year-on-year to AED 2.91 billion driven by growth across core lines of business. Net technical profit increased by 22.8% to AED 145.4 million due to strong margins in key portfolios. 2018 net profit increased by 3.7% year-on-year to reach AED 235.6 million. ADNIC’s strong performance in 2018 has enabled the Board of Directors to recommend the distribution of a cash dividend of 30 fils per share.

Key Financial Highlights (Full year 2018)

• Gross written premiums up 10.1% to AED 2.91 billion, compared to AED 2.64 billion in 2017
• Net profit grew by 3.7% to AED 235.6 million, compared to AED 227.3 million in 2017
• Basic and diluted earnings per share increased by 5.0% to AED 0.42
• Shareholders’ equity increased by 6.4% to AED 2.10 billion, compared to AED 1.98 billion as at 31 December 2017
• Return on equity is 11.6% for 2018
• Full year 2018 proposed dividend of 30 fils per share

Commenting on ADNIC’s performance, Sheikh Mohamed Bin Saif Al-Nahyan, Chairman of ADNIC, said: “On behalf of the Board of Directors, I am pleased to report that ADNIC achieved strong results in 2018, the Year of Zayed, demonstrating the strength and dynamism of the UAE economy. ADNIC’s success against the backdrop of continued challenging market conditions reflects the benefits of our focus on diversification, innovation and efficiency in 2018, with new products, enhanced processes and a broader footprint underpinning our success. As technology continues to reshape the insurance sector, we are committed to ensuring that ADNIC leads the way through innovative service delivery based on sophisticated data analysis to provide a customer experience second to none. Our focus in 2019, the Year of Tolerance, is on using our financial strength and unique capabilities to support our diverse customer base while maintaining our broader contribution to the community and creating value for our shareholders.”

He added: “On behalf of the Board of Directors, I would like to extend our sincere gratitude to His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Ruler of Dubai, and His Highness Sheikh Mohamed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, for their continued support.”

Ahmad Idris, CEO of ADNIC, said: “2018 marked another successful year for ADNIC, characterised by strong revenue growth, high net profit and sharp underwriting discipline, with our performance standing as testament to our innovative and customer-centric service offering. Through this year-on-year growth we maintained our position as one of the region’s leading insurers, delivering against key financial, regulatory and customer service metrics. ADNIC’s achievements were made possible by the deep support of our customers, partners and shareholders, and the exceptional contributions of our employees, and we will continue to use our strength and competitive advantage to protect all stakeholders. In 2019, with the sector well placed for growth, innovation and technological advancement will be key differentiations. ADNIC will continue to develop as a business and seize new opportunities by investing in market leading technologies that both bring us closer to our customers while accelerating the pace of innovation in the wider sector.”

Business Highlights

• Insurance Operations

In an environment that combined challenging economic conditions and continuing intense price competition, ADNIC continued to take requisite actions to deliver profitable growth. On the foundation of its traditionally prudent underwriting philosophy, allied with commitment to superior customer service, across all lines of business, ADNIC succeeded in profitably growing its core lines of business. ADNIC has achieved 10.1% growth in Gross Written Premium to AED 2.91 billion and 22.8% growth in Technical Profit to AED 145.4 million.

The company further diversified its portfolio by adding new product lines and expanding its international business, which now does business in over 90 countries across the Middle East, Africa, the Far East, Latin America and Europe. ADNIC further entered into a number of strategic partnerships which gives the company new routes to market. With its business well-spread across all traditional and emerging distribution channels, ADNIC further cemented its position as a leading composite insurer in the UAE in 2018.

As a result of these initiatives, ADNIC saw strong profitable growth, with its consumer lines business showing particularly robust growth and representing 49.6% of the total portfolio.

• Investments

The year was a challenging one as volatility affected parts of the local and overseas financial markets and impacted ADNIC’s investment result. The impact was partly offset by significantly higher interest and dividend income. Total investment income through P&L was AED 95.6 million in 2018. ADNIC continues to maintain strong liquidity and healthy capital adequacy. The re-affirmation of ADNIC’s rating of A- (stable outlook) by Standard & Poor’s is a testament to the strength of ADNIC’s balance sheet and its ability to meet the insurance needs of its customers.

• CSR

ADNIC recognises that corporate social responsibility is fundamental to its long-term commercial sustainability. ADNIC supported important work throughout the emirates in 2018, including Al Bayt Mitwahid Association, Mohammed Bin Rashid Al Maktoum Knowledge Foundation, UAE Genetic Diseases Association, Sandooq Al Watan, Homat Al Watan and the Absher Initiative.

Market Outlook

Despite some headwinds, the outlook for growth in the UAE and GCC remains positive. The IMF projects 2019 GDP growth for the UAE at 3.7% supported by various factors such as the robust diversified economy, the substantial government investments in the energy sector and infrastructure and the government spending related to the Expo 2020. Continued economic momentum in the UAE and GCC bodes well for the insurance sector.

ADNIC’s investment strategy will continue to focus on maintaining a diversified and liquid investment portfolio. The ability of the region’s capital markets to attract foreign investments will lead to greater fund inflows, and the success of government initiatives to diversify their economies will lead to continued economic progress and create more levers of growth going forward. We believe UAE will continue to be a key destination for global capital due to its open and welcoming business environment, stability and excellent infrastructure and therefore will open up profitable investment and insurance business opportunities for ADNIC.

ADNIC expects market conditions, notwithstanding an improving economy, to remain challenging, with no significant diminution of the level of competition. The global reinsurance market is showing some signs of improvement but pricing internationally, and therefore locally, will remain under pressure. That said, economic growth will present insurers like ADNIC, with a strong market position and customer proposition, with opportunities for further sustainable profitable growth. ADNIC also expects the market to see accelerating use of new technology to drive efficiency and further improve customer experience.

 

 

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