Poor auto sales slash Al Wathba earnings

Abu Dhabi: Al Wathba National Insurance Co (AWNIC) on Sunday reported declines of 74.8 per cent and 71.9 per cent respectively in profits for the first half and second quarter of the current year in comparison to corresponding periods for the previous year.

Profits for the first half of the year were put at Dh9.8 million and, for the second quarter, at Dh6.7 million.

A company official contacted by Gulf News said a drop in local automotive sales and a rise in the number of claims in the second quarter reflected in the lower earnings, though he declined to cite specific figures.

Auto insurance premiums represented 37 per cent of the company's Dh162.7 million in gross first-half premiums, which rose 11 per cent from the first half of 2008, he said.

AWNIC reported second quarter premium income of Dh53.3 million, a 32.7 per cent decline from the first quarter, and underwriting profit of just Dh144,000, down from Dh9.4 million in the previous quarter.

Still, the company recorded a 13 per cent increase in shareholder's equity to Dh441.1 million from Dh390.1 million at the end of 2008.

"The regional economies are yet far from a serious recovery," AWNIC board chairman Shaikh Saif Al Hamid said in a statement.

"This has to a certain extent affected the activities of the insurance sector. Today even if there is positive growth, it is at lower margins than those we witnessed in the past."

AWNIC did not report any gains or losses on securities investments.

Al Hamid said the company is focused on maintaining positive performance.

"It is not anticipated that in the foreseeable future that the regional or international economics [will] witness a serious recovery," he said.

"And with this in mind...[company management] are working very closely to monitor the performance and take advantage of the existing opportunities to ensure the continuation of the positive performance."