Investments cost ADNIC profit

Abu Dhabi National Insurance Company announces a Dh150 million first-half loss, citing a decline in the value of investments as its shares fell to a six-year low.

Abu Dhabi National Insurance Company (ADNIC), the UAE's second-largest listed insurer, announced a Dh150 million (US$40.8m) first-half loss yesterday, citing a decline in the value of investments as its shares fell to a six-year low. ADNIC, which provides life and car insurance in the UAE, posted Dh272.7m in profits for the same period last year.

The loss came as the value of investments held by the firm fell by Dh307.72m during the financial crisis, according to a company statement. Excluding that decline, the firm would have made a profit of Dh157.47m, still lower than the first half of last year. "The decline in the market value of equities available for sale was the major contributor to the change in the investment income year-to-date versus the gains that were achieved in 2008," Walid Sidani, the chief executive, said in a statement.

The insurer said that gross premiums in the first half increased to Dh866.7m from Dh841.6m last year, and income from underwriting insurance policies came to Dh152.5m, up from Dh144m. The company had total assets of Dh3.26 billion at the end of the first half. Citing a 7 per cent rise in revenues, Mr Sidani said the 37-year-old company was "maintaining our prudent risk-underwriting philosophy and customer-centric business approach".

The news of the loss sent the company's shares, which are listed on the Abu Dhabi Securities Exchange, to a six-year low. They fell 8.3 per cent to Dh5.5, their lowest since Aug 2003, according to Bloomberg. [e-mail]