Bupa Arabia’s Q2 net profit in line with estimates: Al Rajhi Capital
Bupa Arabia’s Q2 2019 net profit before zakat of SAR 216.07 million came in line with Al Rajhi Capital’s estimate of SAR 208.9 million, the brokerage firm said in an earnings review on Tuesday.
Strong performance in the bottom-line was mainly driven by 20 percent year-on-year (YoY) increase in GWP to SAR 2.43 billion, the report added.
The brokerage said the increase in table of benefits such as obesity treatment, organ transplantation, neo natal early Screening dental issues and vaccines for children among others, for new/renewed policies mandated by the CCHI has compelled insurance companies to raise their policy prices, which is the main reason for the jump in GWP for the first half of 2019.
The report added that Bupa just signed an agreement to provide health insurance services to STC employees and their families, which will boost the insurer’s 2019 GWP growth to around 14.7 percent.
The brokerage expects Bupa to continue gaining the market share given its leadership position the health insurance market.
Al Rajhi Capital recommended a ‘Neutral’ rating on the stock with a target price of SAR 102 per share.