1- 2008 Business Issues
The 2008 business year was a challenging and we are proud to report positive performance indicators during an unusual year that started with political unrest and witnessed a shift to political stability starting mid year.
The corporate vision and the relentless and coordinated efforts of the staff and management team of AL MASHREK insurance & reinsurance SAL have produced the following:
a) Global Performance Indicators:
Licensing
"AL MASHREK" maintains the widest insurance company branch licensing in Lebanon (Life, Property, Marine, Accident & Credit) for the benefit of its Business Providers and Clients
46% yearly increase in Shareholders Equity
Total shareholders equity increased by LBP 10.5 billion to reach a total of LBP 33 billion at 2008 year end.
33% yearly increase in Total Assets
Total Assets net of depreciation increased by LBP 17 billion to reach a total of LBP 68 billion at 2008 year end
20% yearly increase in Provisions & Reserves
The total Provisions & Reserves increased by LBP 2.6 billion to reach LBP 16 billion at 2008 year end
15% yearly increase in Gross Written Premiums
The Gross Written Premiums during the year 2008 increased by LBP 3.8 billion to reach LBP 29.2 billion
5.75% yearly decrease in ratio of Acquisition Cost to Gross Written Premium
Operating within a highly competitive market, AL MASHREK succeeded in increasing its sales volume during 2008 while decreasing the acquisition cost (commissions & discounts) ratio to gross written premium from 23.62% in 2007 to 22.26% in 2008
1.4% yearly increase in the ratio of Expenses to Gross Written Premium
Similar to all economic sectors, AL MASHREK had to sustain the effects of the macro increase in costs most significantly as a result of increase in staff costs. Despite this factor, the increase in the ratio of expenses (excluding acquisition cost) to gross written premium was sustainable and was 21.6% in 2008 versus 21.3% in 2007.
9% yearly increase in Claims Incurred
the aggregate amount of claims incurred and allocated to the year 2008 amounted to LBP 14 billion, averaging LBP 47 million per working day. It is worth noting that the ratio of increase (2008 vs. 2007) in claims incurred (9%) was lower than the ratio of increase in gross written premiums (15%).
Positive Net Profit
Despite the instability during the first half of the year 2008, the company was successful in generating a small but meaningful amount of profit (LBP 322 million) which is in line with the company’s long tradition of income generation even in the most critical periods. The return on equity reported was 1% in 2008 with more positive outlook for 2009
Secured Capital Solvency Ratio
31.5% at end of 2008 which is comfortably higher than the 10% minimum requirement imposed by the local insurance regulator. The ratio is computed by dividing shareholders equity net of share and property revaluations over gross written premiums (life and non life)
Return on Equity (ROE)
1% in 2008 with more positive outlook for 2009
2- Future Outlook
Guided by our corporate Vision, AL MASHREK remains committed to provide its Customers with most efficient quality of service. In this sense, the company is ISO 9001-2000 certified since November 2007 for the "Design & Provision of Insurance Services".
“AL MASHREK” strategy seeks to expand operations in Lebanon and in other potentially profitable jurisdictions.
On the Local scene, the company will be working to increase its sales by promoting:
1. its Client and Business Providers relations
2. its Life insurance resources
On the territorial level, AL MASHERK has been seeking to make best use from its comparative advantage as being among the oldest private insurance companies in the Arab region that are accustomed to operate within a jurisdiction open to international competition.
Audited by the auditors Emile Chartouni & Sons PKF.
