Qatar Holding is contemplating increasing its equity stake in Qatar Insurance Company (QIC), which is a dominant player in the domestic insurance market.

The entity, a unit of the country’s sovereign wealth fund Qatar Investment Authority (QIA), is keen to increase its holding through purchase of new shares, QIC said in a communiqué to the Qatar Exchange.

Qatar currently owns 12% of QIC, according to Thomson Reuters data.
QIC — whose first half net profit was impacted by exceptional provisions towards special claims related to the natural catastrophes and other huge claims reported in 2012, like the fire of Villagio mall — said it had received an offer from “strategic partner” Qatar Holding.

Net premiums had risen by a marginal 0.28% to QR828.89mn, while gross claims incurred surged 16% to QR662.90mn but reinsurance recoveries fell 5% to QR273.62mn during January-June this year, according to its financial statement.

“The board of directors of QIC welcomed the offer and agreed to the signing of a Memorandum of Understanding, which includes determining the required number and price per share (nominal value and issue premium), and then bring the matter to the competent authorities to obtain the necessary approvals to begin the procedures for the capital increase,” said the communiqué.

However, the communiqué was silent on to what extend the Qatar Holding was willing to increase its stake and at what price. It was also not clear whether the insurance company would go for a rights issue or a private placement.

Total equity stood at QR3.39bn on a capital base of QR891.89mn and earnings-per-share was QR3.39 at the end of June 30, 2012.

The move by the QIA subsidiary, perhaps the first in the sector, comes after the sovereign wealth fund had injected funds in multiple tranche in the country’s banking industry after the financial crisis.

Meanwhile, the Kuwait-based Arab Investment and Export Credit Guarantee Corp said yesterday Total foreign and domestic investment in Arab states rose slightly last year despite widespread unrest.

The investments, both private and government, increased 1.2% to $ 496bn in 2011 from $ 490bn in the previous year, the organisation said in a report, without providing details on the foreign share.

Qatar, Algeria, Saudi Arabia and the United Arab Emirates accounted for 63% of the investments, or $ 312.5bn, said the report, which covered 21 of the 22 members of the Arab League.

The report estimated total capital investments in the 21 Arab nations would reach $ 4.26tn over the next six years up until 2017, with Opec kingpin Saudi Arabia accounting for more than $ 1.0tn.

Capital investments in the Arab countries is expected to hit $ 559bn in 2012 and will gradually grow to reach $ 779bn in 2017, amounting to growth of about 40%, it said.
The report based its optimistic outlook on huge investment plans already announced mainly by the energy-rich Gulf states.

Several Arab nations have been hit by unprecedented uprisings that have already toppled the leaders of Tunisia, Egypt, Libya and Yemen, while the Syrian regime is fighting a bloody battle for survival.