Saudi Insurance Sector- Quarterly

Transcription

1 Saudi Insurance Sector Quarterly Q32018 Head of Research Talha Nazar

2 Company Name The Company for Cooperative Insurance Cooperative Insurance Co. Cooperative Assurance Co. AlRajhi Company for Cooperative Insurance for Cooperative Insurance Co. Allied Cooperative Insurance Group for Cooperative Insurance Co. Cooperative Insurance Co. Cooperative Insurance Co. Al Sagr Cooperative Insurance Co. Malath Cooperative Insurance Co. Saudi Takaful Co. Cooperative Insurance Co. Sanad Cooperative Insurance Company Walaa Cooperative Insurance Co. Allianz Saudi Fransi Cooperative Insurance Co. AlAhlia Insurance Co. The Mediterranean and Gulf Insurance and Reinsurance Co. Saudi Indian Company for Cooperative Insurance Co. Saudi Arabian Cooperative Insurance Company Cooperative Insurance Co. for Cooperative Reinsurance Co. Arabia Insurance Cooperative Company ALAHLI TAKAFUL COMPANY AXA Cooperative Insurance Co. Weqaya Takaful insurance and reinsurance Company CHUBB Arabia Cooperative Insurance Co. Cooperative Insurance Co. Insurance Co. Amana Cooperative Insurance Co. Saudi Cooperative Insurance Co. arine Co. MetLife AIG ANB Cooperative Insurance Co. Aljazira Takaful Taawuni Co. Codes Sanad Walaa Wafa Insurance AXACooperative Weqaya Takaful Alinma Tokio MetLife

3 GWP (Gross Written Premiums) in Q318 stood at SAR 8.66bn depicting a jump of 4.8% Y/Y. NWP (Net Written Premiums) Q318 stood at SAR 7.47bn, depicting a jump of 9.0%Y/Y. NPE (Net Premium Earned) in Q318 at SAR 7.47bn showed a decline of 3.0%Y/Y. In Q318, Health Sector accounted for 62.9% of the total GWP, followed by Motor which accounted for 22.7% of GWP. Market Share BUPA with 32.7% market share in GWP was the biggest player, followed by at 13.9%. Gainer/Loser: MedGulf improved its market share from 6.2% in Q317 to 9.7% in Q318 an improvement of 340bps, followed by Bupa which showed an improvement of 217bps. lost its market share from 17.2% in Q317 to 13.9% in Q318. Retention Ratio: Industry retention ratio stood at 86.3% in Q318, as compared to 79.2% in Q317. BUPA has the highest retention ratio of 99.15% in Q318, Al Rajhi Takaful at 96.2% had the second highest retention ratio. GWPSector WIse NPESector Wise Gross Written Premium % 26.7% 24.2% 22.6% 22.7% 21.5% % 19.3% % Premium CededIndustry 12,000 10,000 8,000 6,000 4,000 2,000 0 Q Q Q Q Q Q Q Q Q Q Q Q Net Premium Earned Q Q Q Q Q Q Q Q Premium Ceded LHS 11.9% 2.2% 24.6% 16.7% 2.0% 15.5% 9.5%2.1% 2.6% Q Q GWP LHS Q Q Q Q Q Q Q Q % Growth (YoY) RHS Q Q Retention Ratio RHS Q Q Q Q Q % Q Q % Q Q % Q % 14.12% Q Q Q Q Q % 28.0% 24.0% % 12.0% 8.0% 4.0% 4.0% 8.0% 12.0% 16.0% 2 90% 88% 86% 84% 82% 80% 78% 76% 74% 72% 70% 23% Top 5 and Bottom 5 Retention Ratio Gross Written Premium Market Share Top 5 Gainers and Losers GWP market Share % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 1 Basis Points 7% 3% 4% 63% Health Motor Property/ Fire Protection and Saving Others Bupa Al Rajihi Malath Chubb Gulf Alinma General 4.7% 30.9% 8.1% 1% 3% 2% 9.7% 13.9% 70% 32.7% Health Motor Protection and Saving Accident and Liability Others AXACooperative Others 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, % 3.0% 2.0% 1.0% 1.0% 2.0% 3.0% 4.0% 17.8% Q % 23.9% Q % Q % Q % 32.1% 27.3% 24.4% 25.1% 27.2% 26.1% 23.8%24.8% 19.9% 6.8% 2.2% 20.9% Q Q % Q Q % Q Q NPE Q % Q Q % Q % Growth (YoY) RHS Q Q % 2.4% 4.4% 2.3% 0.8% 1.4% 4.4% Q Q Wafa Insurance Q Q % 1.1% Q Q % Source: Argaam, SAMA 35.0% % % 1 5.0% 5.0% 1

4 GCP (Gross Claims Paid) in Q318 stood at SAR 6.6bn depicting a jump of 9.0% Y/Y.. NCI (Net Claim Incurred) in Q318 stood at SAR 5.9bn, depicting a rise of 2.8%Y/Y. Market Share BUPA with 27.7% market share in GWP paid the highest claims of SAR 1.83bn, followed by at 26.% market share in claims. Aljazira Takaful paid the lowest claims of SAR 1.8mn. Gross Claims Paid 7,500 27% 6,000 24% 19% 17% 4,500 3,000 1,500 Q Q Q Q Q % Q % 23% 24% Q Q Q % Q % Q % Q % Q Gross Claims Paid LHS 7% Q % Q % Q % Q % Q % Growth (YoY) RHS 9% Q % 2.3% 9.0% Q Q Q % 30% 20% 15% 10% 5% 0% 5% 10% In Q318, Health sector accounted for the highest share in claims at 70.1%, followed by Motor sector at 26.1%. had the highest loss ratio of 101.6% in Q318,followed by at 100.9% in Q318. Aljazira Takaful had the lowest loss ratio of 2.9%. Aljazira Takaful had the lowest combined ratio of 29%. Net Claims Paid 7,000 6,000 5,000 4,000 3,000 2,000 1,000 66% 38% 40% Q Q Q Q % 17% Q Q % Q % 23% 21% Q Q Q % Q Q Net Claims Paid LHS 17% 19% 7% Q Q % 0.2% 3.4% 13.2% Q Q Q % Growth (YoY) RHS Q % 5.3% 5.5% 2.8% Q Q Q Q % 65% 60% 55% 50% 45% 40% 35% 30% 20% 15% 10% 5% 0% 5% 10% 15% 20% Claims Market ShareCompany wise Claims Market Sharesector wise Claims PaidCompany wise 2% 3% 7% 9% 27.7% 26.0% Others Malath AXA %26 1% 1% 2% %70 Health Motor Protection and Saving Property/ Fire Others IN MN SAR 2,000 1,800 1,600 1,400 1,200 1, AXACooperative Q Q Wafa Insurance Loss Ratio Combined Ratio Q Q % 200% Q Q Al Rajhi Takaful AXACooperative 150% 100% 50% 0% 50% AXACooperative Wafa Insurance Source: Argaam, SAMA, AlJazira Capital

5 Net income for the sector stood at SAR 260.0mn in Q318, as compared to SAR mn in Q317, depicting a fall of 60.6%Y/Y. Net income before Zakat stood at SAR 352.5mn, depicting a fall of 53.4%. with net income of SAR 224.6mn, showed a rise of 13.3%Y/Y. Bupa showed the highest surplus, from its insurance operations, at SAR 247.5, depicting a rise of 7.9%Y/Y. Rajhi Takful showed the highest investment income of SAR 61.3mn in the sector, registering a rise of 28.4%Y/Y. In MN SAR Net Income 1, %66.6 YOY %136.4 QOQ (100) (500) (373) (900) (1,300) (1,141) Net IncomeCompany wise Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Aljazira Takaful showed the highest Operating margins at 2.8%, and net margin at 31.4%. Rajhi takaful posted the highest ROE of 30.4% Walaa posted the highest ROA of 6.1 %. In Mn SAR AXACooperative Operating MarginsHighest 10 Net MarginsHighest 10 Surplus From Insurance Operations 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Jazira Takaful Chubb Arabia Trade Arabian AXA Union Shield 35.0% % % 1 5.0% Jazira Takaful Chubb Walaa AlAlamiya Arabian Trade Arabia Shield Union In Mn SAR AXACooperative ROETop 5 /Bottom 5 ROATop 5/ Bottom 5 Investment Income Al Rajihi Trade Union Bupa Wafa Amana MetLife AIG 1 5.0% 5.0% % % 3 Walaa Al Rajihi Bupa Chubb Amana MetLife In Mn SAR AXACooperative Wafa Insurance Source: Argaam

6 had the lowest PE of 7.0x, followed by with a PE of 7.5x. for Cooperative Reinsurance Co has the lowest PB of 0.7x, followed by with a PB of 1.1x Only 4 companies gave out dividends, had the highest dividend yield of 3.9%. Tadawul Insurance Index 1 Yr Performance TASI (LHS) Insurance Sector (RHS) 1 Yr Performance TASI (LHS) (RHS) Lowest PE WALAA CHUBB Ahlia AlRajhi Takaful Lowest PB Sagr U C A MALATH CHUBB BUPA1 Yr Performance TASI (LHS) Bupa (RHS) Alrajhi Takaful1 Yr Performance TASI (LHS) Alrajhi takaful (RHS) Highest Dividend Yield 4.5% 4.0% 3.9% 3.8% 3.5% 3.0% 2.8% 2.5% 2.0% 1.9% 1.5% 1.0% 0.5% Medgulf1 Yr Performance Walaa1 Yr Performance Top 5 CompaniesMarket Cap TASI (LHS) Medgulf (RHS) TASI (LHS) WALAA (RHS) In Mn SAR 12,000 10,000 8,000 6,000 4,000 2,000 AlRajhi Takaful

7 APPENDIX 1 GWP YoY QoQ NWP YoY QoQ NPE YoY QoQ Q32017 Q22018 Q32018 Q32017 Q22018 Q32018 Q32017 Q22018 Q ,421 1,756 1, % 31.2% 1,161 1, % 29.4% 1,759 1,832 1, % 2.8% % 31.8% % 32.2% % 7.9% % 36.2% % 16.5% % 3 Al Rajhi Takaful % 10.2% % 10.1% % 4.8% % 2.1% % 19.2% % 14.4% % 44.2% % NM* % NM* 2,523 2,020 2, % 40.2% 2,497 1,992 2, % 41.2% 1,939 1,909 1, % 1.4% % 84.9% % 128.9% % 13.5% % 15.3% % 13.4% % 11.6% % 20.8% % 32.1% % 36.6% % 15.4% % 36.2% % 3.2% % 57.0% % 34.0% % 8.0% % 1.2% % 4.5% % 6.9% % 3.6% % 21.4% % 2.2% % 37.5% % 4.7% % 3.6% % 21.2% % 27.6% % 1.4% % 201.0% % 201.5% % 3.7% Wafa Insurance % 3.3% % 12.9% % 9.9% % 4.3% % 25.0% % 26.3% % 9.1% % 3.3% % 7.5% % 4.1% % 33.9% % 18.7% % 5.0% % 24.5% % 11.1% % 26.4% % 135.2% % 480.3% % 24.3% AXACooperative % 120.9% % 117.4% % 6.9% % 38.9% % 66.3% % 2.7% % 33.7% % 37.4% % 19.5% % 7.5% % 0.6% % 1.7% % 3.9% % 5.2% % 24.1% (2) 102.7% 103.1% (2) 103.2% 105.3% % 55.5% % 34.8% % 35.3% % 9.1% % 39.2% (1) 101.2% 106.9% % 25.5% % 209.6% % 580.6% % 18.9% Total 8,261 7,549 8, % 14.7% 6,854 6,252 7, % 19.5% 7,529 7,665 7, % 0.5% Source: Argaam, *NM: Not meaningfull

8 APPENDIX 2 Gross Claims Paid YoY QoQ Net Claims Paid YoY QoQ Q32017 Q22018 Q32018 Q32017 Q22018 Q ,512 1,970 1, % 12.8% 1,488 1,647 1, % 2.5% % 9.9% % 4.9% % 1.5% % 563.0% Al Rajhi Takaful % 10.3% % 8.2% % 80.5% % 29.2% % 14.1% % 24.3% 1,536 1,642 1, % 11.6% 1,475 1,538 1, % 6.1% % 31.2% % 3.1% % 15.5% % 19.7% % 1.9% % 17.7% % 27.3% % 8.4% % 16.7% % 70.7% % 15.7% % 4.7% % 9.5% % 1.1% % 15.0% % % 4.9% % 5.7% % 13.3% % 2.4% Wafa Insurance % 63.5% % 24.3% % 28.9% % 8.9% % 11.5% % 18.3% % 2.8% % 2.8% % 1.1% % 6.2% % 10.3% (1) % 19.4% AXACooperative % 24.4% % 0.8% % 5.1% % 20.3% % 39.8% % 47.2% % 31.5% % 55.7% % 22.2% (10) % 249.1% % 9.4% % 12.0% % 31.2% % 1.3% % 21.0% % 46.8% % 18.8% % 193.9% Total 6,062 6,681 6, % 1.1% 5,701 5,807 5, % 0.8% Source: Argaam, *NM: Not meaningfull

9 APPENDIX 3 Net income Before Zakat YoY QoQ Net Income YoY QoQ Q32017 Q22018 Q32018 Q32017 Q22018 Q32018 (10.4) (1.3) % 313.6% (10.9) (1.8) % 228.5% % 20.7% % 18.0% (22.9) 114.3% 159.8% (38.0) 126.8% 252.4% % 89.4% NM* 155.4% 60.1 (8.6) (79.8) 232.7% 824.2% 56.6 (10.6) (80.8) 242.8% 665.3% % 3.4% % 7.8% % 35.5% % 42.5% % 34.3% % 38.7% % 30.7% % 44.9% (3.3) 262.3% 963.1% 0.7 (1.1) (4.7) 764.8% 319.3% (7.4) 144.9% % 14.4 (2.0) (9.6) 166.8% 388.3% Wafa Insurance (3.6) (10.7) (5.2) (10.7) (10.7) (7.1) 452.7% 34.0% 0.9 (10.7) (7.1) 861.9% 34.0% % 17.9% % 8.3% % 27.7% % 9.1% (1.1) 128.0% 137.6% 3.0 (0.1) (2.2) 175.0% % % 12.4% 2.5 (0.3) (0.9) 136.2% 240.4% % 22.9% % 17.1% (9.4) 148.1% 184.9% (8.7) 148.7% 190.5% % 41.0% % 46.5% 14.1 (0.3) (5.0) 135.4% % 14.5 (1.2) (5.6) 138.6% 376.8% AXACooperative % 21.1% % 13.5% 4.6 (0.8) (6.7) 245.6% 733.1% 3.4 (2.3) (7.8) 325.8% 240.2% % 58.5% % 70.8% % 27.0% % 301.7% (0.3) % 55.8% (3.6) % 109.5% (2.2) 3.1 (11.9) 451.4% 487.3% (3.7) 1.1 (13.9) 280.4% % % 36.9% % 43.7% % 503.3% 7.5 (2.2) % 287.2% % 49.4% % 57.8% % 84.2% % 86.4% % 46.4% % 46.7% (3.2) (9.3) (4.7) 46.0% 49.2% (4.3) (10.7) (6.1) 41.7% 43.0% Total % 21.8% % 25.5% Source: Argaam, *NM: Not meaningfull

10 APPENDIX 4 Market Cap PE PB Dividend Yield 7, M 3.5 METLIFE AIG ANB NM* % MALATH INSURANCE NM* 1.3 1, NM* WALAA M WAFA Insurance % AlAhlia % U C A M , % AlRajhi Takaful 2, CHUBB AXA Cooperative 1, M , M M NM* NM* 2.0 Sector 34, Source: Argaam, *NM: Not meaningful

11 RESEARCH DIVISION Head of Research Talha Nazar Analyst Sultan Al Kadi, CAIA Analyst Jassim AlJubran Analyst Waleed AlJubayr Analyst Muhanad AlOdan BROKERAGE AND INVESTMENT CENTERS DIVISION General Manager Brokerage Services & sales Alaa AlYousef AGMHead of international and institutional brokerage Luay Jawad AlMotawa AGM Head of Western and Southern Region Investment Centers Mansour Hamad AlShuaibi AGMHead of Sales And Investment Centers Central Region Sultan Ibrahim ALMutawa AGMHead of Qassim & Eastern Province Abdullah AlRahit RESEARCH DIVISION RATING TERMINOLOGY AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. 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