Bahrain Kuwait Insurance Company (BKIC) said its profit for the first quarter of this year increased by 108 per cent to BD1.9 million ($5 million) compared to BD914,000 for the same period last year.

Technical profits (core business) decreased by 7 per cent during the quarter to BD569,000 from BD611,000 last year, mainly due to provision of additional reserves for claims incurred but not reported, said a report in the Gulf Daily News, our sister publication.

Chairman Murad Ali Murad said the company recorded extraordinary profits from the sale of investment property located in the Diplomatic Area.

The decision to sell the property was, however, taken two years ago when the BKIC moved its operations to the new location in Seef District.

Owing to this transaction, investment income in the first quarter was BD1.6m as against BD492,000 earned in the same quarter last year.

This was despite provision of additional reserves amounting to BD363,000 for impairment in value of old investments, whereas the figure stood at BD17,000 only for the corresponding period last year.

Furthermore, the company has taken additional reserves valued at BD70,000 towards provision for bad and doubtful debts.

Shareholders' equity increased by 1 per cent to BD33.7m at the end of the first quarter, from BD33.3m at the end of last year.

Return on shareholders' equity for the first quarter is 5.6 per cent as against 3.1 per cent for the same period last year.

Earnings per share for the first quarter were 27 fils, compared with 13 fils for the corresponding period last year.

Technical reserves increased by 5 per cent to BD14.2 million from BD13.6 million at the end of last year.

BKIC chief executive Ebrahim Al Rayes said the premium increased marginally by 1 per cent to BD9.1m from BD9m last year, mainly due to severe competition in the market.

The intensity of competition encouraged the company to upgrade its services to the insuring public, and thus maintain its leading position in the Bahrain market, he said.

"The company will continue to harvest goodwill built over the years and closely monitor its services in order to maintain the position."

Al Rayes said the management hoped that the coming period would be better with regard to both business volumes as well as profitability.

The company has formulated an ambitious business plan for the next few years which involves targeting of profitable business segments in order to further improve the return to shareholders, he added.-TradeArabia News Service