Bupa Arabia released preliminary headline numbers for 4Q16. Net income for 4Q16 came in at SAR193mn, 8% lower Y-o-Y, and broadly in line with our forecast of SAR196mn.   Key highlights: i) Marginal decline in GWP (-1.3% Y-o-Y) and NWP (-2.2% Y-o-Y) ii) Investment income rise 4x Y-o-Y; iii) Deterioration in loss ratio (83.9% in 4Q16 vs. 79.3% in 4Q15); iv) Reversal in bad debt provisions   Our take on the results: Underwriting results were weaker on a Y-o-Y basis, driven, in our view, by pressures on pricing and slower expansion in customer base. GWP and NWP were relatively flat on a Y-o-Y basis. However, loss ratio rose 459bps Y-o-Y to 83.9% in 4Q16. While the loss was slightly higher than expected, it was in line with guidance from the company of a slight deterioration. Weaker economic conditions likely led to pressure on premium pricing, while claims also rose 16% Y-o-Y. Investment income, however, rebounded strongly, benefitting largely from higher interest rates. This partially mitigated the impact of weaker underwriting results on earnings. (Company disclosure, Murad Ansari)   Bupa: SAR130.98 as of 18 January 2017, Rating: Buy, TP: SAR155.00 per share, MCap: USD2,794mn, BUPA AB / 8210.SE