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Dubai: Islamic Arab Insurance Company, listed as "SALAMA" on DFM, has received board approval for its audited financial statements for the year ended December 31, 2020.
Highlights:
Significant growth in net profit to AED 157.04 million; underlying net profit increased by 162.50% YOY.
Gross written premiums grew by 5.5% to AED 1.17 billion, despite the challenges posed by the pandemic.
The Board will propose for approval at the AGM a cash dividend of 8.25 fils/share for the six months ended December 31, 2020.
Strong performance in the UAE and significant improvement in investment income support the results.
In 2020, SALAMA made excellent progress in achieving its business objectives. In particular, the Company has greatly improved core business profitability and investment returns, nearly tripling its net profit to AED 157.04 million (2019: AED 59.8 million).
At an operational level, SALAMA has successfully focused on the local UAE market in 2020, where the Company sees the greatest growth potential. This is reflected in gross written premiums, which increased by 5.5% overall to AED 1.17 billion for the full year 2020 (2019: AED 1.11 billion), despite the challenges posed by COVID-19. Excluding the one-off net profit of AED 67 million from the partial sale of SALAMA's stake in SALAMA Cooperative Insurance Co (SALAMA KSA), underlying net profit increased by more than 50% to AED 90 million compared to AED 59.8 million in 2019.
The results reflect the benefits of the Company's prudent investment strategy adopted last year to redeploy cash flow into high quality assets, recent product launches and continued focus on technology-driven solutions. Management remains focused on these key growth drivers in 2021, which will underpin SALAMA's continued progress in realizing value for its policyholders and shareholders. With the growth in profitability, the Company also significantly reduced its accumulated losses to AED 308.05 million (AED 376.82 million as at 31 December 2019. Commenting on the Company's performance, Jassim Alseddiqi, the Chairman of SALAMA, said: "Despite the challenges posed by the pandemic, SALAMA has made strong headway in executing its new strategy and has more than doubled its net profit - I believe this is a rare achievement in the current climate. We are excited about the future prospects of the Company, especially considering that we have taken all the right and necessary steps, starting with the change in leadership with the appointment of Fahim Al Shehhi as the new CEO, to steer the Company in the right direction in line with our strategy and to increase SALAMA's profitability and investment returns. Our goal for 2021 is to keep the ball rolling and create long-term sustainable value for our policyholders and shareholders while serving our customers effectively and efficiently."
Given the significant growth in net profit and shareholder interest, the Board of Directors will propose for approval at the Annual General Meeting (to be held in April 2021) a cash dividend of 8.25 fils/share for the six months ended 31 December 2020.
SALAMA stands as the largest sharia’h compliant Takaful operator with ‘AAA’ level capital adequacy as per S&P. SALAMA remains committed to serving partners and customers while enhancing shareholder returns in 2021 and beyond.
© Press Release 2021
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