Salama posts highest Q1 profit since 2011

Islamic Arab Insurance Company, listed as ‘Salama’ reported a net income of Dh24.22 million in the first quarter of 2021, its highest Q1 net profit since 2011, and an increase of 84.43 per cent compared to Dh13.13 million in the first quarter of 2020.

Salama started the year on a strong note, continuing the upward trend in achieving its strategic objectives. In particular, the company delivered a solid performance in improving core business profitability and investment income, which increased by 60.05 per cent to Dh12.25 million in the first quarter of 2021, compared to Dh 7.65 million in the same period last year.

Salama’s strategic focus on the local UAE market, where it sees the most growth potential, enabled the company to maintain its gross written premiums at Dh 427.55 million in the first quarter despite a challenging macroeconomic environment amid the continuing impact of the pandemic.

Salama’s subsidiaries in Egypt and Algeria also generated positive results, recording a profit of Dh 6 million in the first quarter of 2021 compared with Dh 2m the same period last year. Meanwhile, Salama’s holding in Salama Cooperative Insurance Co (Salama KSA) also contributed to the increase in investment income to Dh 12.25m, reflected in the marked to market uplift of Dh 2.9 million in its remaining holding.

Importantly, Salama has achieved significant growth in net investment income, due to increased invested asset base by 7.26 per cent from Dh 1.143 billion to Dh 1.226 billion in Q1 2021. The increase demonstrates the progress the company has made in redeploying cash flows into high-quality assets as part of the prudent investment strategy adopted by the Board last year. The strong profitability in Q1 overall enabled the company to significantly reduce its accumulated losses at Dh 286.67m, as against Dh 308.05m in December 31, 2020.

In the first quarter, Salama made significant progress in its digitisation efforts, mainly focused on improving the customer journey and experience in both B2C and B2B distribution channels. The company continues to enhance its IT systems and integrate technologies such as AI and machine learning to provide state-of-the-art Takaful solutions to its customers.

Jassim Alseddiqi, chairman, Salama said: “Salama has made excellent progress in implementing its investment strategy despite the unprecedented challenges posed by the pandemic. The fact that we recorded our strongest first quarter in the last ten years and that the company’s investment income and earnings per share increased significantly is testament to the effectiveness of our investment strategy and reinforces confidence in Salama’s continued growth potential. Salama is well positioned to accelerate this growth trajectory and create sustainable, long-term value for our policyholders and shareholders.”

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.

Fahim AlShehhi, CEO of Salama, said: “Our digital transformation efforts are aimed at improving our bottom line and taking the customer experience to a new level. We are very pleased with how this is unfolding. The strong first quarter results demonstrate the efficacy of our Board’s strategy and the company’s agility and resilience amid ongoing macroeconomic challenges. I am very confident that we will maintain our momentum and deliver a strong performance, especially as our digitisation initiatives come to fruition.”

— business@khaleejtimes.com