Chairman’s Message

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Dear Shareholders,

On my own behalf and on the behalf of my colleagues, members of the Board of Directors, I'm honoured to submit to you the Fifty-Third Annual Report of Gulf Insurance Group. This report reviews the most important accomplishments of the Group during 2016, which ended  with an optimistic tone and achieved unique results which reflected the strong financial position and the strong performance of the Group resulting in maintaining its local and regional advanced position in the insurance sector due to its successful strategy and precautionary policy. We hope to highlight some topics, subject of the interest of our esteemed shareholders and all stakeholders in relation to the Group activities.
Good Performance during 2016 reflects a year of great efforts exerted by the Board of Directors in cooperation with the executive management. No doubt challenges and difficulties faced by different markets of the region due to the slump of oil prices and the political events taking place in the countries of the Middle East have affected the different economic sectors, including the insurance sector and they will form a pressure factor on the performance level of all sectors in the future as well.
The great development of the Group since 1962 was due to the huge growth witnessed by our beloved country. This development was inspired by values of ambition, leadership and innovation adopted by the founding fathers, as these values will remain the most important values and pillars of the Group.
One of the main factors supporting the Group's success is our unique trend of supporting local and regional businesses. Innovation is our motivation that guided us throughout our career. This commitment enabled us to continuously anticipate to our clients' expectations.


Our Future Aspirations and Kuwait Vision 2035

While the oil exporting countries were suffering from the slump of oil prices, the Kuwait Vision 2035 (New Kuwait) was developed to transform Kuwait into an international commercial and financial centre by 2035.

In 2010, the government developed a vision for transforming Kuwait into a commercial and financial centre and give up oil economy gradually as the objectives of this vision were divided into five years expiring by 2035. The New Kuwait vision was established on seven major pillars aiming to reduce dependency on oil; to reduce the government's role and expenses; to assign a greater role to the private sector and enable the Kuwaitis to own shares in partnership companies between the governmental and private sectors. The revenues of the development projects listed in the plan are expected to be of fifty billion Kuwaiti dinars (USD 180 billion) by 2035.

Indeed, there are mega projects starting to appear, especially the infrastructure projects paving the way to the New Kuwait Vision such as building one of the biggest bridges in the region, residential cities in the north and south of the country, road construction  projects, new airports and ports, power plants and developing the oil sector.

This promising strategy offering the Group wide opportunities of growth to provide more services to the clients and benefits to the shareholders and all related stakeholders.

Growth and Stability

The Group continued its strong performance during 2016 and achieved 12 million Kuwaiti dinars as a net profit, recording by that return on assets with 3.2%; and return on shareholders’ equity with 14.6% which considered one of the  highest rates of return on shareholders’ equity in the insurance sector. This reflects the strong and good performance of the Group in all the business fields, as the net operational profits grew during 2016 by 9.2% to reach 13.4 million Kuwaiti dinars.

If we look to the near future, we have all the confidence in our strategic path followed by the Group, as it is able to face the future challenges better.

Strong Credit Rating

Despite the regression of some credit ratings in the region due to the economic changes, the Group remained appreciated by the credit ratings agencies, where the Group has affirmed its credit rating assigned by Standard & Poor's agency, further, A.M. Best has upgraded the financial strength rating of the Group to "A" (Excellent), and due to the regional good reputation of the Group, the Group conducted a credit rating by Moody's Corporation which has assigned an "A3" insurance financial strength rating to the Group; and by that, the Group became the first insurance company in Kuwait to have three credit ratings from international agencies with stable future outlook.

Standard &Poor's has affirmed the credit rating of one of our most important Subsidiaries – Gulf Insurance and Reinsurance Company "GIRI" with "A-" ;  further, A.M. Best has upgraded the financial strength rating of GIRI to "A" (Excellent); as well, Moody's Corporation has assigned an A3 insurance financial strength rating to GIRI with stable future outlook. Moreover, most of our subsidiaries affirmed their credit ratings assigned by the international agencies.

Participation in National Projects

Since we are a Kuwaiti leading company, we contribute effectively in developing the national economy via providing insurance services, supporting small and medium projects and applying the objectives of Kuwait Vision 2035 to all of our business units. We will continue in the next year as we did in the last five decades performing our major role in contributing to the growth and vitality of our national economy.

Our Regional Expansions

The external Group companies continued their strong performance, which reflected the success of the Group strategy aiming to diversify the income resources and careful regional expansion.

Perhaps the most regional achievement we have accomplished was entering the Turkish market by means of acquisition of 90% of the shares of Turins Sigorta, a Turkish company, to pave the way for extending the scope of our services to our clients and all stakeholders.


Our Human Resources, One of the Most Valued Assets

Our human capital is one of our most valued assets. The Group enhanced its investments in developing the human resources throughout various programs such as the Management Developing Program (MDP), an academic program for preparing the future leaders, aiming to discover the potentials of youth of educational and professional qualifications to achieve local and external gains for knowledge and skills to qualify them to hold managerial positions in the Group and the insurance sector in general.

Further, we continued our investment in educating, training, developing our employees and providing them with a work environment characterized by innovation and empowerment.

The Group's Corporate Governance Culture

We have enhanced the Corporate Governance system in the Group as we have adopted more than sixty policies and mechanisms to enhance the Corporate Governance rules in the Group in addition to the Corporate Governance guidelines.

We are committed to intensifying the concepts of internal control, transparency, disclosure, stakeholders' rights and other applications of the Corporate Governance. We have submitted to you the Corporate Governance report of 2016 for your consideration and to provide a true picture of the governance standards followed by the Group during the last year.

The Group Contribution in the Society's Sustainable Development

The Group, during 2016, sponsored many social, educational, humanitarian and charity events centred around youth, education, health, fitness and enhancing culture and Kuwaiti heritage.

We continue our support and sponsorship to the "Proteges Program" under the umbrella of KIPCO. This program is designed to positively contribute in discovering the massive potential of the Kuwaiti youth as the Group is always the first participant when it comes to motivating and qualifying the Kuwaiti youth.

Along with our sponsorship and assistance to the "KIPCO Tamkeen Award" for Young Entrepreneurs in 2016, the Group signed a comprehensive insurance contract covering the organization of sports events as part of Group's continuous interest in sports and safety of the various sports lovers.

The Board of Directors & The Executive Management

  • The board of directors consists of ten board members…… and the board of directors have five committees initiated from it, Board Executive and Investment Committee, Board Audit Committee, Board Risk Committee, Board Corporate Governance Committee and Board Nomination & Remuneration Committee.
  • The board of directors member’s remuneration for this year is KD 185,000
  • The amount of salaries and other short-term benefits and end of service benefits obtained by the executive management amounted to KD 1,058,484  compared to KD 944,534 in 2015.
  • The company allocated two cars for the services related to the board.
  • The Group were not imposed to any sanctions from the supervising authorities during the year 2016.

Recommendations and Suggestions

 It is the pleasure of Board of Directors to recommend to your esteemed General Assembly to distribute the available profits for the financial year amounted in KD 38,014,371 in the following manner:

KD129,837 For the statutory reserve reaching the full amount of the share capital .
KD1,264,773            10% for the voluntary reserve.
KD7,160,459 40% of the Share Capital as cash dividends





for the shareholders representing 40 fils per share (compared to 40 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 29,459,302 is to be retained forward to the next year.

Thanks & Appreciation


At the end of my speech, and on my own behalf and fellow Board members of the Group and its executive management, We would like to extend our heartfelt gratitude to His Highness the Prince of Kuwait, His Highness the Crown Prince, His Excellency the Prime Minister, for their wise leadership of the state towards achieving more advancement, welfare and stability. We would like also to take this opportunity to extend our congratulations to you and the Kuwaiti people on the National Celebrations of Independence and Liberation. We also would like to express our deepest appreciation to the Ministry Of Commerce & Industry and the Department of Insurance Companies for their understanding to the situation of the local market and for seeking its best interests.

A thank also goes 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 would like to thank the Capital Markets Authority (CMA), and 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 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 2017 will see the achievement of the goals for which we aspire.

May peace and Allah’s mercy and blessings.

Farqad A. Al-Sane