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ARIG back to profitability

DUBAI The Arab Insurance Group (ARIG) returned to profitability in its core general insurance operations last year but the company suffered a net operating loss of $36.8 million after writing down bad debts from previous years and losses from reinsurers who failed in the wake of the September 11 attack on the US.

The company said its financial restructuring plans were successfully completed last year after accumulated losses, brought forward from previous years, were written off against capital and other reserves.

ARIG chief executive officer, Udo Krueger, said: "Our core investers remain committed to our recapitalisation efforts and to supporting the company in moving forward on the basis of balances results this year and the appropriate reserves from previous issues.

"That is why our main focus in 2003 will be to concentrate on our core business and to implement cost containment measures before pursuing further strategic expansion objectives."

He said the company would streamline its operations to improve profitability and competitiveness while concentrating on the core reinsurance business which accounted for 99.3 per cent of non life premiums last year. He said the consequences of the attack on the US on September 11 had created a global reinsurance capacity crunch, particularly in Arab markets where several major players have either withdrawn or retrenched.

He continued: "The quick and effective steps taken by ARIG to respond to those events enabled us to support our clients and maintain our role as the leading Arab reinsurer."

He added: "With the current outlook of improved market conditions and the return to profitable underwriting, coupled with a leaner organisation and a strong focus on containment measures, the foundations for a significant improvement in performance in 2003 is in place."