Dar Al Takaful (DAT) on Monday said it incurred Dh10.3 million net loss in first half of 2022 due to impacts of Covid-19, pricing pressures, investment losses in second quarter, and one-off merger related expenses.
In a statement, the company said its strong overall financial fundamentals and resilience positioned the company to capitalise on growth opportunities, particularly pursuing and completing the merger with Watania at the end of the first half.
"As such, this is the last quarter for DAT’s independent financial reporting with the Dar Al Takaful, the combined listed entity on DFM, set to report its consolidated financials starting from the third quarter this year," the company said.
It further said gross written contributions down marginally by 4.4 per cent from Dh420 million in first half of 2021 to Dh401.4 million in January-June 2022 with aggressive deleveraging and de-risking measures implemented.
"Operating expenses increased due to rising inflationary environment and one-off merger transaction expenses," it added.
The company said it is already seeing the positive outcomes of these turnaround measures with the family and individual family segments delivering robust results, and the medical insurance segment growing steadily by nine per cent while investment income increased to Dh5.6 million during the first half of this year as compared to first half of 2021.
“As the economy has rebounded in response to positive government actions, this will have a positive flow on effect on the various business sectors including the broader insurance and Takaful industry. While we continued to address the lingering impacts of the Covid-19 pandemic and the significant headwinds resulting from rising inflation and interest rates globally, we have successfully implemented proactive measures and precautions to rebalance our portfolio and limit outsized exposure," Dr Ali Saeed bin Harmal Aldhaheri, chairman of DAT, said.
"Through the merger between DAT and Watania, the new combined entity DAT PJSC is well positioned to benefit from the potential realization of significant cost and revenue synergies, as well as reduced operating expenses and better IT platforms. In addition, risk will be diversified across a larger policyholder base and product portfolio, thereby reducing exposure to single events,” he said.
Aldhaheri added: “Our larger scale as one of the leading Takaful providers in a highly fragmented market will help us better manage risk, expand geographic reach, as well as generate sustainable returns and create value for our shareholders and key stakeholders."
"With a substantially larger balance sheet exceeding Dh2 billion in total assets, we can develop new and innovative products to meet the evolving needs of Takaful customers while maintaining long term competitive edge in the market and supporting our drive to benefit from future growth opportunities including exploring possibilities to expand beyond the UAE,” Aldhaheri said.
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