Bahrain Kuwait Insurance Company (BKIC) registered a net profit of BD1.5 million ($ 4m) in the first half of this year, it announced yesterday.

This compared with BD2.6m in the same period last year.

Second-quarter net profit stood at BD588,000.

"The drop in net earnings was due to the impact of economic activity in general, increased claims, especially in the motor department due to increased car accidents rate and drop in investment income during the period," chief executive Ebrahim Al Rayes said.

Shareholders' funds rose by four per cent to BD28.5m in the first half.

Technical reserves increased by 9pc to BD14.9m for the second quarter.

The return on shareholders' funds dropped to 5.3pc for the second quarter, compared with 9.5pc for the same period last year.

Earnings per share dropped to 21fils from 37fils for the second quarter.

Mr Al Rayes expressed hope that Bahrain's economy will rise from the stalemate it had faced in recent times, especially in the construction and commercial sectors.

"This is represented in the movement of imports and exports, which would improve the performance of the insurance sector in general," he said. "The executive management has taken adequate steps to improve the profitability of the company for the coming period," he added.