Fidelity United announces to accelerate a sustainable and long-term growth

Fidelity United (formerly known as United Insurance Company) is one of the oldest companies in the UAE that also celebrated its 45th anniversary in 2021. Recently, the insurance firm completed its Dh60 million rights issue, which is the second injection of funds in the company since 2017.

There are two significant elements to this capital injection for Fidelity United. Firstly, the injection was mainly required in compliance with the solvency requirement of the Central Bank. Secondly, this injection demonstrates the trust of the company’s shareholders over the Board and the Executive Team to deliver sustainable and long-term profitable growth.

The CEO of Fidelity United sends a strong message to the market that they are growth-focused and are ready to compete. The company is excited to have had two rounds of injection in the last four years, which is rarely seen in the market.

Bilal Adhami, CEO, Fidelity United, shared his insights on his aspiration for the company. “I joined the company in 2018 with a clear mandate to inject new energy and direction into the organisation. Over the years, the company has experienced some challenges, especially pre 2018, but thanks to the capital injection of Dh100 million in 2017, we were able to stabilise our operations significantly. As of Q4 2021, we were ranked 16th in respect of gross premium. Considering 2018 was our first year as a new company, we have not only grown in terms of the top line but have started posting profits since Q1 of 2019. It is rare to find a company with negative equity four years ago that has turned around its fortunes and is now in the position that we are in now. This is just the beginning. Despite the competitive market in the UAE, where the number of insurance players as compared to the population would be probably one of the highest in the world, we will continue to develop our brand to compete with the top players. We will not be in the race of just growing top line. Whatever line or segment we will grow, we will ensure that it generates a return to the shareholders.

Recognising the achievements, Adhami attributed the milestone to the teamwork within the organisation, shareholders and the unwavering support of the board members. The company also appreciates the continuous support from the Central Bank, previously called Insurance Authority, for their guidance throughout the journey. Lastly, he commends the organisation’s employees. He strongly believes that without their dedication, loyalty, and sincere effort, this success would not have been possible.

Sharing his thoughts on the changes he would like to see in the insurance industry in the UAE, Adhami noted that he would like to see more consolidations within the industry.

“There is a large number of insurance players in the market and this is certainly not healthy for sustainable growth of the industry as a whole. This ultimately puts the industry in an unhealthy situation whereby price war prevails over fundamental underwriting. Secondly, despite the motor pricing and acquisition cost having been addressed following the introduction of unified motor policy by Central Bank, the leverage allowed during the last couple of years along with the price war to get the top line has negatively resulted in the performance of the companies in 2021. With the current number of players in the market and the lack of centralised data about drivers, insurance companies must operate as per the pricing structure of a unified motor policy. Companies must make enough money so that they can invest in human capital and the modernisation of the sector,” added Adhami.

Following the capital injection, Adhami is also optimistic of better results in 2022 for Fidelity United. He wishes the best for the company, the insurance industry and the companies in other industries.