Arig posts net profit of USD 30.4 million for 2006

The company announced a net profit of USD 30.4 million for its 2006 Financial Year (2005: USD 48.2 million). Despite ending below the previous year's result, performance in 2006 has in fact exceeded that of 2005 if extraordinary items of USD 10.4 million in 2006 and USD 28.9 million in 2005 are ignored.

Consequently, Arig's Board of Directors has recommended a cash dividend of 10% on the company's paid-up capital or 10 cents per share. The dividend remains subject to clearance by the Central Bank of Bahrain and approval at the company's Annual General Meeting to be held on 29th March 2007.

Arig managed to further improve on its underwriting results and associated costs from reinsurance, in spite of a softening in the terms of trade that impacted the international reinsurance industry. The company was also able to isolate itself from the downward turn in the regional equity markets. Having reaped the benefits of its conservative investment policy and a positive performance in the global markets, investment earnings increased to USD 38.4 million (2005: USD 33.2 million).

Stricter underwriting discipline and portfolio screening resulted in a 4.2% reduction in Gross Premium Written, which is now reported at USD 166.3 million (2005: USD 173.7 million). But its profitability driven approach leaves the company less concerned about absolute volume growth, especially as it has been developing new attractive business fields, which are expected to make a positive contribution to future years' results.

Arig's Singapore Branch managed to expand premium income from Far East markets by 54.7% year-on-year, while the Group's Islamic Takaful Re subsidiary firmly established itself with Gross Premium Written of US$ 15 million in 2006, contributing USD 2.2 million to the Group result in its first year of operations.

In consolidation of the company's new management team led by CEO Yassir Albaharna, the Board appointed Andreas Weidlich to the position of General Manager - Reinsurance with effect from 1st January 2007. He has been overseeing Arig's combined reinsurance interests since joining the company in April last year.