Reconciling accounts receivable/payable and addressing associated credit risk implications have posed challenges for some insurance companies in Qatar, according to an analysis by Badri Management Consultancy, an international company offering actuarial services, financial services, Strategic HR consulting, data management and business intelligence.
In its report, titled “Listed Insurance Industry Performance Analysis – 1H2024”, Badri says that these factors fuel an expectation of increased provisions for write-offs by insurers.
In the report, Badri presents its analysis of the financial results of the seven listed companies in Qatar for the first six months of this year. They are the four conventional insurers — Qatar Insurance, Doha Insurance, QLM Life & Medical Insurance, Qatar General Insurance & Reinsurance — and the three takaful companies — Qatar Islamic Insurance, Damaan Islamic Insurance and Al Khaleej Takaful Insurance.
Notably, for the conventional insurance companies, there was a 10% decrease in Insurance Revenue, reaching QAR6.1bn ($1.65bn) in 1H2024, compared to QAR6.7bn in the corresponding half in 2023. Insurance Revenue, a metric under IFRS 17, encompasses Gross Earned Premium along with Expected Credit Losses (ECL).
For takaful companies, gross contribution is still being used as their top line measure. The gross contribution increased from QAR0.7bn in 1H2023 to QAR0.8bn in 1H2024. Takaful companies are still in the process of adopting IFRS 17.
Insurance Service Results for conventional companies saw a 30% increase to QAR0.5bn in 1H2024 from QAR0.4bn in the corresponding period in 2024.
The recorded profit (after tax) for the analysed group of seven listed companies experienced an increase from QAR0.6bn in 1H2023 to QR0.7bn in 1H2024, marking a 16% increase. It's crucial to highlight that for takaful companies, the analysis consolidates net profits across policyholder and shareholder accounts for comparison.
While conventional companies have successfully disclosed their financials under IFRS 17, the transition has not been without challenges. While progress is evident, many insurers faced obstacles.
Badri expects improved financial reporting quality as companies refine their data and operations.