A diplomatic stand-off between Qatar and its neighbours is having minimal affect on the operations of the Qatar Insurance Company, the parent of Bermudian-based Qatar Re.

However, the soft market conditions have taken a toll, with half-year profits falling to $139 million from $165 million during the same period in 2016.

The group wrote more business in the first six months of this year than during in the corresponding period the year before, and also saw an increase in investment income.

Mr Khalifa Abdulla Turki Al Subaey, group president said: “The financial results for the first half-year of 2017 clearly demonstrate the effectiveness of QIC Group’s diversification strategy which is predicated on tapping into global growth opportunities whilst maintaining our leading position in our home markets.

“With minimal exposure in the countries involved in a diplomatic rift with Qatar, it is business as usual for us.”

Seven countries in the region, including Saudi Arabia, Egypt, Bahrain and UAE have cut ties with Qatar, accusing the county of supporting terrorism. Qatar has said the diplomatic action is unjustified.

QIC said the premium income it generates from the countries involved in the rift “does not represent a material portion of the group’s revenue”, and it said its investment exposure within those countries is minimal.

For the six months to the end of June, QIC’s gross written premiums grew 14 per cent to $1.714 billion.

Qatar Re, together with London-based Antares and Malta-based QIC Europe Ltd, accounted for 71 per cent of premium volume, marginally higher than the previous year.

QIC’s investment income rose from $132 million to $155 million. In a statement, the group noted: “Qatar’s domestic financial markets have proven resilient to the most recent challenges. Over the past six weeks, the country’s key stock market index has recovered to the level before the regional political standoff.

“Moreover, most regional and international observers do not expect any material adverse impact of the political standoff on Qatar’s economic growth performance, even under a prolonged scenario.”

The group said its net underwriting result was affected by “extraordinary events”, mentioning the UK government’s decision to cut the Ogden Discount Rate, which affects the motor insurance market in Britain. QIC has reacted by strengthening its motor reserves by $31 million.

The group’s half-year net underwriting result fell to $72 million from $120 million in the same period of 2016. The non-life combined ratio rose from 96.9 per cent to 101.5 per cent.

Looking ahead to the remainder of the year, Mr Al Subaey said: “In line with our business objectives, we will continue to adapt to the changing environment and renew our focus on a bottom line driven sustainable growth strategy for QIC Group.”