Kuwait's largest insurance firm rises after stellar profits.
Kuwait's Gulf Insurance profit rises more than 50%
Kuwait's largest insurance company had its biggest rise in a month after it said its net profit for last year increased by more than 50 per cent.
Gulf Insurance reported net profit of 7.7 million Kuwaiti dinars, up from 5m dinars in 2009. The stock rose 1.6 per cent to 610 fils on the Kuwait Stock Exchange yesterday.
The company, which was established in 1962, has grown from being a personal and commercial insurer in Kuwait into a regional provider with subsidiaries in Saudi Arabia, Lebanon, Egypt, Syria and Bahrain. Fairfax Financial Holdings of Canada bought 41.3 per cent of Gulf Insurance last year to fund Gulf Insurance's regional expansion. That stake makes Fairfax the second-largest shareholder after Kuwait Projects Company, Gulf Insurance's parent company.
Over the past year, Gulf Insurance has increased its stake in Arab Orient Insurance of Jordan to 88.7 per cent from 55 per cent. It also raised its stake in Bahrain Kuwait Insurance Company to 56.1 per cent from 51 per cent.
"Most of our subsidiaries have performed well in their insurance operations despite challenges Arab markets faced, namely the drop in indices of financial markets, increase in price competitiveness, and the drop in public and private-sector spending," said Farqad al Sane, the chairman of Gulf Insurance.
The company is now eyeing the Algerian and Iraqi insurance markets. Over the past year the company has been setting up Khaleejia Life Insurance and Khaleejia General Insurance in Algeria. Feasibility studies and discussions are under way in preparation for Gulf Insurance to enter the Iraqi market.
The company's board recommended the distribution of a cash dividend of 25 fils per share. The board also proposed the distribution of 5 shares for each 100 in shareholders' hands. The recommendation is subject to the approval of the general assembly of shareholders.