Walaa CEO says Q3 2020 profit growth buoyed by higher net earned premiums

Walaa Cooperative Insurance Co. reported a rise in net profit before Zakat and tax, as net earned premiums grew by 10.61% in line with an increase in gross written premiums (GWPs) by 21.97%, Johnson Varughese, CEO at Walaa, told Argaam in a telephone interview.

“This profit increase was partly offset with an increase in additional premium reserves by SAR 39.66 million, as the company provided additional reserve to cover the potential impact of a two-month extension of motor policies and an increase in other general and administrative expenses by SAR 12.71 million due to the merger costs,” Varughese explained.

The decision of the Ministry of Municipal and Rural Affairs that directs contractors to insure against inherent defect insurance is expected to show higher growth in the GWPs, but due to the long-term nature of policy coverage, the benefits will show after three years.

Elsewhere, Varughese said that Walaa boosted its market share to 8% in Q2 2020, from 7.5% in 2019.