Oman Qatar Insurance Company SAOG (OQIC) Earnings Call Transcript

Good afternoon, and welcome to Oman Qatar Insurance Company MSX discussion session for H1 2026. My name is Mohammed Jawad, Chief Financial Officer and the Investor Relations Officer. And I have with me here Mr. Ali Mohamed Lawati, Chief Business Office. And we have online Mr. Abdullah Al Mezeini, Compliance Manager; and Mr. Omar Al Shanfari, Head of HR [indiscernible] Our CEO is actually in an urgent commitment, but I hope he will be able to join us later during the session. So without further ado, we kick off the discussion for H1 2026. So our agenda for today is items highlighting key performance elements. So we will be shedding light on the Board of directors and organization trust, the performance and highlights of H1 2026 that will be the premium and revenue growth in Slide 3, the underwriting performance, number 4; and the key financial ratios, number 5. We will be highlighting the distribution of our gross level premium across different business lines and we will be concluding growth investments and solvency position and market pollution. But In terms of Board of directors composition, we have Mr. our chairman and board -- Chairman of the Board. And we have Mr. [indiscernible] he's the deputy chairman and -- Board member and Chairman of Auditors committee. We have Mr. Abdullah Al Mazahi, he's the board member and nomination committee member. He is the strategy and investment committee member as well. We have Mr. Unni, a Board member, strategy member and nomination committee member. Mr. Mohammad Al-Kharusi, a board of director member, Audit committee member; Mr. Ahmed El Tabbakh, Board of director member, Chairman of nomination and remuneration committee and a member in audit committee as well. And finally, Mr. Chirag Doshi, a board of director member, chairman of investment committee and a member in nomination and remuneration committee. So the composition of the board is staying here in H1 2026. Moving to the organization charts. The organization is headed by Chief Executive Officer, Mr. Hasan Yaseen Al-Lawati, and we have Mr. Ali Al Lawatili, Chief Business Officer and we have Mr. Omar Shanfari, Senior Manager, Government Relations and HR. For the highlights of 2026 H1, we have made a difference this time compared to the last half year. So this time we are giving main highlights and comparing it to the previous H. So in terms of gross return premiums, the company reported OMR 50.76 million for the first 6 month of 2026. This is 3.4% H1 2025. That gave us OMR 35 million insurance revenue in IFRS 17 compared to 9% year-on-year in H1 2025. Investment income was extremely positive this year, so it has doubled compared to H1 2025. We have reported OMR 4.6 million investment and other income. General and administrative expenses including depreciation is OMR 800,000. This is the unallocated portion. Others are coming. Insurance, this is 11% higher than last year. That drives a profit after tax of OMR 2.7 million, which is 41% higher than H1 2025, which gave a return of equity of 6.4% compared to 4.6% in H1 2025. The net asset value per share is 262 baisa versus 242 baisa in H1 2025 and the company is coming at a combined ratio of 102.4 versus 99.6 in H1 2025, which will be elaborated in further slides. Now going to the premium and revenue growth. So here on this slide, we are comparing 2024 premium and revenue. The gross revenue premium is IFRS 4 terminology and insurance revenue is as per IFRS 17, the new insurance standard. So here we are seeing 2024 versus full 2025 and H1 of 2025 versus H1 of 2026. We can see that between '24 and '25, there is. very minor changes in terms of gross return premium and insurance revenue. And when we compare H1 versus H1, we can see that also the gross return premium is almost similar around OMR 11.8 million increase in gross return premium and that also converted into OMR [ 203 ] million increase in insurance revenue for the first time. Now in term of underwriting performance, which is an also here we are comparing underwriting income in IFRS 4 and insurance service reserve in IFRS 17. So we can see that between '24 and '25 full year, we have OMR 5.8 million real underwriting income reported versus almost OMR 5 million in 2025, so OMR 800,000 less. That gave us insurance service result of OMR 1.8 million versus OMR 280,000 in 2025. Now if we compare first six months of 2025 versus first six months of 2026, we have around OMR 3 million in H1 2025 versus OMR 1.6 million in H1 2026. And Insurance service result of OMR 130,000 in H1 2025 versus OMR 830,000 negative in H1 2026. That will be explained when we are touching the business mix in the upcoming slides. So, if going to the key financial ratios, the company reported 4.68 in H1 2025 return on equity versus 6.4 in H1 2026 and a return of investment of [ 6 ] 2026 versus 3.2 in H1 2025 mainly coming from investment. The net asset value per share as we stated earlier is 262 baisa versus 242 baisa. So these are the main financial ratios. So going to the investment -- going to the GWB mixed pair line of business. So here when we are seeing the line of businesses, we can see that the first or the highest line of business is medical line of business which is around 37.9% of the gross surge premiums of the company which is exactly similar compared to H1 2025. So at the same exposure to medical. However, we can see that the second largest line is property where it was a 30% last year, but this year it dropped to 28% but still remains the second largest line of business. Largest business is 4.7 compared to 4.1. Marine and aviation reduced from 12 million to 8 million. Liability lines reduced increased to 6% compared to 5.8%. So this is the percentages of life of illnesses. Now if we highlight the reasons behind the drop in the underwriting income and insurance service result, which drives 102 combined ratio. So the main highlights are coming from two high retention lines which are medical and Personal lines. So in terms of Personal lines, the company witnessed a positive performance in the comprehensive policies. However, the company is proposing a negative performance in the third party. And the company is taking necessary actions to correct the position in third party policies. The second reason behind the drop in the performance was property and then after that -- legal. In property, if we compare 2025 H1 versus 2026 H1, the company received significant claims in property line of business, which was booked in H1 2026 and we believe that the position going forward will be corrected gradually in H2 2026. Going to medical line of business, the line of business was under pressure in H1 2025 and still it is under pressure in H1 2026. The dynamics of medical insurance in the sector is below the first and we are seeing a connection across the sector and the company took extra precautions to reduce the negative impact from medical H2 2026 and this will be previously stated in Q3 for progress at final FY2026 performance. Going to the investment portfolio and income, we have two elements here which we are shedding light on. We have the portfolio composition for H1 2026 and the income composition. So the philosophy of investments in Oman Qatar Insurance is distributing the investment portfolio between equities and fixed income. So equities are 30% of the portfolio and fixed income takes 70%. So 29.9%, almost 30% is kept in equities and mutual fund. 55.8 are our bonds and support and we have 30.6% as a other elements. So the company is still 30.6% as other elements. So the company is still maintaining the same distribution between bonds at least and equities. So equities this time are little bit less than 30% because the company realized a lot of them in H1 2026 and this is clear in the investment income composition. So we can see that the composition this time in H1 2026, 3,000,000 are direct realized and unrealized gains from equities, 1.3% interest income. And third and the 0.3 is only the OMR 300,000 is only the dividend income which is lower than the dividend income of H1 2025 because the company realized a lot of these equities. So the investment philosophy is very brilliant, its very -- It's towards protecting policy holders from and making a fantastic returns. Moving to the financial position and solvency of Oman Qatar Insurance, the company is sitting on a total asset of OMR 119 million, which is 8% higher than last year H1 2025, which was OMR 109 million. The total equity, the net worth of the company is now OMR 42 million compared to OMR 37 million in H1 2025. The total investment base of Oman capital insurance as on 30th June 2026 is OMR 76.9 million. This is significantly higher by 12% compared to H1 2025 of OMR 68.6 million. The insurance contract liability is sitting at 69.5 versus 65.2 in H1 2025. In terms of solvency, which is based on RBC capital calculation, we can see that the company always maintaining a good coverage ratio and a total solvency well above the required margins. So for 2025 the company reported 42 points, almost OMR 43 million as a total solvency amount compared to OMR 17 million required market and this is 121%. And if we compare to last year, it was 111%. So the coverage ratio is improving and the total solvency amount is improving as well. In terms of employees and organization requirements, the total employees adds on H1 2026 is 213 compared to 205 in H1 2025 and the organization ratio is almost similar, 79.8 compared to 80%. So the company is investing in local talents, supporting them and focusing on well educated workforce to be added to the company. In terms of market position and we are concluding with this slide, OQIC remains ranked at #3 in insurance industry by gross return premium. So if the company is having a 15% market share across the sector in terms of gross return premium. So with this, we have concluded our presentation and we open the floor for discussions and for questions.

Yes, [indiscernible], you can ask your question.

Am I audible?

Yes, we can hear you.

I have a couple of questions. If I'm not wrong, you mentioned that your medical segment has been under -- the medical segment has been under pressure since 1H '25 and 1H '26 as well. And can you tell -- can you give some -- can you shed some light on this, like what are the pressures that segment is facing? Also your Marine and Energy segment, despite the decrease in the insurance revenue, we see an improvement in profit and the insurance service results. So if you could share some light on what is happening in that segment as well? Also what can we expect for the second half of 2026, that would be really helpful.

Yes, thank you for your question. And it was an expected question. So in terms of medical insurance, So what is happening is that we are witnessing increased inflation in medical costs in Oman. And this is also witnessed through So it is a trend now we are seeing. So the company is taking collective measures, but then when we see the inflation, it is higher than the collective measure taken. So still the pressure is coming mainly from the increased reported claims and the cost of claims. So the cost of claims despite any correction we are taking is still increasing and all the industry is cooperating with the regulator to assess the position and to take corrective action. So it is mainly the increase in claim cost in 2025 and 2026. I'm sure what Marine, Mr. Ali, can you shed some light?

On the Marine portfolio, due to the war situation, we have seen an increase in the premiums and has been also some of the clients were taking war risk. So the war risk premium has also accounted. So basically the increase in rates was because of that.

Any other questions?

Okay. Yes, I -- just one more question on the -- if I may.