Chairman’s Message

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Dear Shareholders,

On behalf of myself and my fellow Board Members, I’m honored to present to you the Annual report of Gulf Insurance Group, which highlights the outstanding performance of the Group during 2018. Gulf Insurance Group is proud of its status today and is devoted to its leading integrated position, as one of the largest entities in the insurance sector in the Middle East. We had to keep innovating in order to maintain our sustainability and in order to continuously satisfy our clients, shareholders and group employees requirements and aspirations in the light of the renewed challenges. Our success is attributed to our strategy which is based on evaluating and redressing our business in order to continuously understand and get prepared to all the developments, as a result, we are in a constant state of innovation and renovation, which has assisted us to remain in an ongoing dynamism and a high degree of flexibility.


Developments of the Global Economy

Over the past year, the risk of negative developments that threatens the global economy has increased, whilst the possibilities of a sudden positive developments occurring has declined as the global economy has continued its expansion. The activity of larger economies was affected by a number of unique factors, but those developments were the result of prevailing mood decline in the financial markets and uncertainty with regards to the trade policy, in addition to concerns regarding the potential of the Chinese economy. According to IMF projections, the world economy will grow by 3.5% in 2019 and 3.6% in 2020. As for the Middle East and North Africa region. The growth is expected to remain low at 2.4% in 2019 then recover to approximately 3% in 2020, There are also other several factors that influence the prospects of the economy in the region, including the weak growth in oil (petroleum) production, which evens out the expected improvement in the non-oil activities, in addition to the geopolitical tension in several economies..


Improvements in the National Economy Environment

On the domestic level, the status of the general budget has improved on the background of oil price increase (petroleum), where the preliminary data of the general budget shows fiscal surplus of 3.2 Billion Kuwaiti Dinar of the first ten months of the financial year 2018/2019 (from April to January and prior to deducting future generations reserve funds). The Kuwaiti economy has also ended 2018 with a stable future outlook and an elevated credit rating on which all three major international credit rating agencies has agreed. This is the result of the combined efforts of many regulators fronted by the Ministry of Commerce & Industry, which in turn has led a surge of drastic changes in the business environment which reflected to create a paradigm shift in the project and investment industry, as the ministry has succeeded in issuing 10 thousands business licenses within one year, in addition to a drastic paradigm decrease in the commercial license issuance procedures, and launching the Kuwait Business Center (single window) containing information systems in order to provide accessible services and to keep pace with the rapid expectations. In addition to the regulations which is still under preparation including the regulations for organizing the insurance sector in which the ministry has exerted huge efforts with relevant stakeholders. We also cannot overlook the efforts of the Central Bank of Kuwait in maintaining the stability of the national economy through its monetary policies that contributed to preserve the national economy in the shade of crises and fluctuations witnessed by the region and the global economy during the past four years, this has reflected on the country rating keeping it in the top credit ratings worldwide.


Meeting the expectations of 2035 vision

There is a renewed sense of aspiration in which Kuwait vision 2035 has pumped in the vein of the private sector, which will enhance the key role in which the pioneering Kuwaiti organizations are playing in leading the economic transformation in the State of Kuwait. The 2035 vision represents a special importance to Gulf Insurance Group, as it affirms the utmost capability in which the insurance sector could contribute to the national economy and an important element to accomplish the adherence of the State of Kuwait to build a developed infrastructure and a diverse sustainable economy. In addition to a sustainable living environment, and as a leading company in the insurance industry, naturally the group is prepared to contribute in developing the insurance system in the State of Kuwait, and in order to do so, the group have reinforced its strategic platform in conjunction with Kuwait launching its aspirational 2035 vision. We at Gulf Insurance Group will do our best efforts to contribute in achieving the objectives of that vision, and the group will play a key role in the future of our nation as role models. This will be through keeping pace with the development agenda, in order for the group to keep its leading position in the MENA region as well as contribute in a promising more diverse national economy.


In practice, major projects have started paying off, an example is the opening of Sheikh Abdullah Al Salem Cultural Centre, which is a live interpretation of Kuwait’s cultural strategy and a reflection of the civilized side of the State of Kuwait and an assurance of its pioneering culture in the region. In addition to the opening of Kuwait Motors Town which is considered to be one of the biggest motor sports town worldwide. It is projected that this integrated town will attract regional and international championships, the area of the infrastructure development has also witnessed luminous accomplishments in which the new terminal building T4 has been inaugurated, which could accommodate up to 6 million passengers annually, consisting of approximately 55 thousand square meters, and in due course of providing quality healthcare, there has been remarkable achievements during 2018, including the opening of Al Jahraa medical hospital, which is characterized by a variety of modern medical competencies and systems, which has been attracted by major global companies in the medical industry, thus, this is considered as one of the landmarks of the medical and healthcare sector in our country Kuwait, also the opening of Jaber Al Ahmad hospital which is considered to be the largest hospital in the Middle East region well as the 6th largest hospital worldwide, in which the hospital was built on approximately 720 thousand square meters.

The epic and developmental renaissance in which our beloved Kuwait is witnessing has been accompanied with the Kuwaiti Boursa standing on the brink of a paradigm shift in order to become a more vital and mature stock market, and in the league of leading stock markets. The Capital Markets Authority and Kuwait Boursa’s efforts has been culminated by announcing the upgrade of Kuwait Boursa to an emerging market, this is due to its active role in stimulating the Kuwaiti financial market as well as keeping pace with the latest systems which is a reflection the growing investors’ confidence in the Kuwaiti market, this supports the foreign investment inflows and enhances the liquidity in the national capital market.

The Group’s Achievements

The Board of Directors of Gulf Insurance Group cherish the group’s accomplishments and performance. Perhaps one of those major achievements is the group’s success in managing one of the biggest insurance policies in Kuwait’s history, which is the medical insurance policy for retired citizens “Afya”, where the group has invested major efforts in order to provide the finest insurance services worthy of our retired citizens. For that the best technical systems that has been used to automatically connect between us and between the medical service providers network which surpass over 400 service providers whether it is a hospital or a medical center, and containing over 2600 doctors of all majors as well as over a 180 pharmacies. The group has achieved one of the most remarkable achievements in the insurance sector history in the State of Kuwait. The group’s strenuous efforts have been reflected since the beginning of the policy activation in providing over 4,309,000 medical services, whereas the number of in- hospital operations has reached about 35,000 operations including the “one day” operations, also provided over 86,000 service request for MRIs and CT scans, as well as 22,500 endoscopies and about 321 birth deliveries. The dental records has reached about 363,900 medical cases, the group has also provided an advanced center to service the beneficiaries which operates 24 hours / 7 days a week. The center has received over 243,800 calls and inquires estimating about a 9000 per month. This unique center which specializes in insurance services is considered to be one of a kind in the State of Kuwait.

In this context, I cannot but pay a tribute to the work forces of the group for demonstrating their commitment on all levels. Without their dedication, we wouldn’t have been able to achieve the job on this international high level project on time and with the required efficiency worthy of our retired senior citizens symbol of honor and fulfillment, whereas giving them proper care is incumbent on us, and I would like to seize the opportunity to commend the cooperation shown by our partners from both the private and public sectors for this project, which has enhanced the chances of the project’s success. This achievement wouldn’t have been possible without the support and cooperation displayed by all the service providers.



Sustainable Investment in the cutting-edge technologies

Sustainable investment in the cutting-edge technologies has been always a characteristic of the group, and an integral part of our strategy. We realized the importance of shifting to electronic insurance services and effective high technologies in early stages, which simplifies and cuts short insurance services to all of our customers. We have out-headed and have become first insurance company in the State of Kuwait and in the region to issue various insurance policies through the internet and cell phones, as well as provide the instant medical approval system, a recording system and an online follow-up on claims electronically, in addition to several other electronic services. These applications were appreciated by beneficiaries of our provided services, and it is planned to launch more of these electronic services during the upcoming year.

The group is determined to access the digital technology world in a systematic manner, as we recognize the importance of developing, innovating and keeping abreast of the state-of-the-art technology in the areas of digitalization as well as modern insurance systems, and the extent to which it affects the success of our business.

Strong Financial Performance

In the midst of a challenging operational environment, the group sought operational excellence in operations and capital investments significantly in order for the group to achieve its objectives. This has been reflected in the financial statements of 2018, as the positive developments the group has accomplished stand out on the operational level as well as its financial indicators, which has resulted in the group achieving a net profit of 11,901,838 million Kuwaiti Dinars for 2018, recording a return on assets of 2.8% and a return on shareholders’ rights of 13.35%, which is considered to be one of the highest returns on the shareholders’ rights in the insurance sector, which reflects the solid and good performance achieved by the group on all of its business-levels.

And we will continue to work hard in order to ensure that Gulf Insurance Group becomes stronger, more profitable and to sustain its position as a leading company of the insurance sector on an international level in line with our aspirations.

The Highest Credit Ratings

The group always believes in the necessity to continue building on the good outcomes it keeps achieving year after year, and the strong momentum of its business activities, in order for this ongoing focus to contribute in creating value and enhance profitability levels, as well as to keep improving its investments and returns levels through focusing on income generating assets, these strenuous efforts has paid off, whereas the group has kept the highest credit ratings given by the most prominent international credit rating agencies which are standard & poor’s, Moody’s and A.M. Best, and is considered to be within the highest credit rating levels. The group enjoys an A rating (excellent) by A.M. Best Europe - Rating Services Limited, as for Standard & Poor's for rating services it gave the group a rating of an A-. The group has also received an A3 rating by Moody's for credit rating services. We are looking forward to the sustainability of the our strong financial results and to increase our credit rating in the foreseeable future.

Global Recognition

Our efforts has received vast recognition on a national and international level. The group has continued to acquire prestigious rewards during the year, including the ‘Insurance Brand of the Year’ by the World Branding Awards during a prestigious ceremony held in Kensington Palace, London, which was attended by prominent international figures. The group has also won the "Best Insurance Brand", MENA Region – 2018 from Global Brands Magazine. The efforts of the executive management of our group has also been culminated as the CEO received the "Personality of the Year" award by Middle East Insurance Industry Awards – Dubai.

The aforementioned is considered to be a recognition by prominent international and national entities, and an evidence of the success of the group's endeavor year after year until it has been able to occupy a leading position among the insurance companies in the whole region.

Our Workforce are the Core of our Success

During the year, the group's strenuous efforts has continued in order to enhance its investment in the development of its human resources, which is a journey of success that gets brighter year by year, this was proven in practice when the group continued the progress of its Management Development Program (MDP), which is an academic program that the group has adopted during the past few years which contributes in shaping the leaders of the future, the group has not been content with what was achieved in this program so far which is considered to have no precedent in the insurance sector, but we went over with our aspirations in granting chances to our youngsters, the leaders of the future who possess the professional and educational qualifications to prosper and obtain professional degrees in the insurance field. The program has aimed this year at providing a chance for our workforce to obtain a Certificate In Insurance (Cert CII) from the Chartered Insurance Institute (London).

The group is convinced that investing in human resources is not exclusive only to its workforce, but it should include all other stakeholders. Whereas building and sustaining a long-term relationship with all stakeholders is considered to be a fundamental tenet of the group's success on the longer run, which benefits not only the group but the sector as a whole. Therefore, the group didn’t only avail the chance to its workforce to obtain this certificate, but also provided a chance to its special clients and insurance brokers to participate. We were extremely satisfied with the outcomes of this unique experience which has resulted in (25) people achieving the Certificate In Insurance (Cert CII), (20) of them are from our workforce and (5) brokers as well as the group's customers, also (54) people has obtained general insurance certificates, including (45) persons from our workforce and (6) brokers as well as (3) our customers.

The group is convinced that investing in human resources is not exclusive only to its workforce, but it should include all other stakeholders. Whereas building and sustaining a long-term relationship with all stakeholders is considered to be a fundamental tenet of the group's success on the longer run, which benefits not only the group but the sector as a whole. Therefore, the group didn’t only avail the chance to its workforce to obtain this certificate, but also provided a chance to its special clients and insurance brokers to participate. We were extremely satisfied with the outcomes of this unique experience which has resulted in (25) people achieving the Certificate In Insurance (Cert CII), (20) of them are from our workforce and (5) brokers as well as the group's customers, also (54) people has obtained general insurance certificates, including (45) persons from our workforce and (6) brokers as well as (3) our customers.

The group has also continued developing and building the capacities and skills of its current workforce, as we believe that our workforce is the core of our success, and that there is no future without providing the ideal environment that enables them to gain more self-confidence and pride of their accomplishments, and for that, the group has established an e-learning platform which is considered to be one of our key achievements in the area of staff development. Over 300 staff members have benefited from that electronic platform. This was achieved by completing over 3000 training courses, including managerial professional skills. The platform is considered to be one of the top training platforms on the insurance sectorial level. with an ability to access the platform "anytime and anywhere". It is with this flexibility a major contributor in brining training skills to the human resources of the group through all channels to where they are.

Corporate Governance Culture Supports our Vision

The group is constantly keen on achieving the highest levels of integrity and transparency in order to establish the corporate governance culture. Tthe group has adopted an effective corporate governance system based on principles and basics approved by the Capital Markets Authority in the State of Kuwait. Through embracing these principles and taking it at face value, we constantly seek to sustain a top-level of corporate governance according to the highest standards and professional practices as well as global-level policies which leads to solidifying a governance environment that underpins the group's values and assists us in transforming our vision into a reality.

We would like to acknowledge that during the year of 2018, there were no imposed penalties on the group by supervisory and regulatory entities.

Our Commitment Towards Society


Our success is not only limited to the strength of our performance or our ability to generate profit, but extends to include our capabilities in helping others as well as fulfill our commitment towards the society in which we operate in. The group has continued in providing its support to the Protégées Organization, which is a non-profit organization that aims primarily to encourage the youngsters to invest in themselves and to take advantage of their youth-based capacities in serving their societies in an environment that is characterized by a significant degree of contestability and changing life-styles. The group has always offered its support to youngsters and has provided sponsorship to the Protégées Organization for eight consecutive years, in addition to our efforts in spreading insurance and health awareness in some of the countries we are based in, we are committed to carry-out a key role towards our workforce, at which the group has organized an educational seminar raising awareness of breast cancer for our female workforce with the objective of increasing their understanding of breast cancer as well as its prevention methods. As our belief that the health of our staff is at the top of our priorities, the accomplishments achieved in order to support society development as well as enhance the national content are considered to be the source of our pride and appreciation.

Power of Innovation and Future Aspirations

Throughout the years, our vital self-capability of innovation has been a cornerstone to our success, and has driven us to a robust leading position as well as enhance our consolidated capability to add inevitable value to our customers and shareholders. Our commitment towards innovation is evident in every detail of our business. Furthermore, our hefty investment in human resources ensures our firm belief in innovation and constant creativity. This profound understanding to the value of innovation and creativity and the determination to apply it in every accessible area and on all group-levels has enabled our leadership. In addition to this, successful innovations has provided Gulf Insurance Group with the required flexibility throughout the past years to perform with high efficiency even during times in which the macroeconomic environment has been challenging.

Therefore, we have much to look forward to during 2019 and after, and sustainability will remain at the core of everything that we do as we thrive to enhance the fundamentals of our strategy. Operational excellency will remain our workforce's objective, and we will focus on improving the productivity and efficiency of all of our businesses. We are fully committed to seizing every automation and technological opportunity, and build a culture that encourages ongoing learning, we will invest in pioneering techniques in order to enhance the group's regional role in the insurance sector, as we have a firm belief that the modern technologies are capable of changing the face of the insurance industry, and we aspire to adopt this change.

Enhancing Shareholders Value

The Board of Directors is pleased to recommend to the General Assembly the following dividends for the profits of the financial year ended 31/12/2018, which amounted to 42,239,930 KD as per the following:

  • KD 1,261,539 for the voluntary reserve.
  • KD 6,444,005 of the Share Capital as cash dividends for the shareholders representing 36 fils per share (compared to 30 fils per share in previous year) taking into consideration the number of treasury shares at the time of the general assembly, the remaining amount KD 34,534,385 to be retained forward to the next year.

Gratitude and Appreciation

At the end, and on behalf of myself and my fellow Board members of the Group and its executive management, we would like to extend our heartfelt gratitude to His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah Prince of the State of Kuwait, His Excellency Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah the Crown Prince, for their wise leadership of the state towards achieving more advancement. We also would like to express our deepest appreciation to the Ministry of Commerce and Industry and the Department of Insurance Companies as well as the Capital Markets Authority and the Kuwait Boursa for their understanding to the situation of the local market and for seeking its best interests.

The appreciation is also extended to the Ministry of Interior represented by the General Department of Traffic for their constant efforts to improve the compulsory traffic accident of the insurance sector.

We also deeply thank and appreciate our distinguished clients and as well as local and international reinsurers & insurance brokers for giving us their trust, continuous support and cooperation.

Moreover, we would like to extend our appreciation to the Group’s management and personnel for their great efforts and dedication which contributed in achieving the targeted results, we also would like to thank Kuwait Projects Company (Holding), our largest shareholder, and Fairfax Financial Holding Limited, our second largest shareholder for their constant cooperation and support. We hope that 2018 will witness the achievement of the goals for which we aspire.

May the peace, mercy, and blessings of Allah be upon you,,,

Farqad Abdullah Al Sanea

Chairman of the Board of Directors