SALAMA’s preliminary 2020 net profit more than doubles to AED136.13m

• Significant growth in net profit for the year to AED136.13m, more than double last year; underlying net profit up more than 15 percent YOY
• Gross written contributions increased 6 percent to AED1.17bn, despite challenges of the COVID-19 pandemic
• Board proposes 3 fils/share cash dividend for 6-months ending 31 Dec 2020, in addition to the special dividend announced earlier of 5.25 fils/share which bring the total to 8.25 fils/share to be recommended to be distributed to shareholders.
• Results underpinned by strong UAE performance and significant improvement in investment income

Dubai, UAE: Islamic Arab Insurance Company, listed as “SALAMA” on DFM, announced its preliminary results for the 2020 fiscal year.

2020 has seen SALAMA achieve excellent progress in its business objectives. In particular, the Company has executed strongly on improving core business profitability and investment income, with the results that net profit for 2020 more than doubled to AED136.13m (2019: AED59.82m).

At an operating level, during 2020, SALAMA has successfully focused on the local UAE market, where it sees the most growth potential.

This is reflected in its gross written contributions which increased six percent overall to AED1.17bn for the full year 2020 (2019: AED1.11bn) despite the challenges posed by the global COVID-19 pandemic.

Excluding the one-off net profit of AED67m from the partial sale of SALAMA’s holding in SALAMA Cooperative Insurance Co. (SALAMA KSA), underlying net profit saw an increase of more than 15 percent to AED69m compared with AED59.8m in 2019.

In addition, SALAMA has achieved a significant uplift in its net investment income, which grew from AED22m in 2019 to AED 45m in 2020.

The increase demonstrates the progress which the Company has made in redeploying cash flows into quality assets as part of the prudent investment strategy adopted by the Board last year.

The Company was also able to reduced its accumulated losses significantly to AED314.78m (AED376.82m as at 31 Dec 2019) thanks to its strong profitability for the year.

During 2020, SALAMA once again demonstrated its commitment to its customers, as it was one of the first insurers in the UAE to launch its new suite of insurance products following the introduction of the new UAE regulation 49 (also known as BOD-49) in October 2020.

The results show the early benefits of these new products and will support SALAMA’s continued growth in the coming year, in combination with the Company’s ongoing implementation of technology-driven solutions and industry-leading business practices.

Commenting on the preliminary results, Jassim Alseddiqi, SALAMA’s chairman, said: “SALAMA made huge strides in 2020, even in the face of an unprecedented global pandemic. Crucially, we continued to serve our customers effectively and efficiently throughout this challenging year and the results are testament to this.

As a Board, we are also focused on SALAMA’s profitability and investment income and again, we have delivered on our strategy to enhance both. It’s particularly pleasing to see investment income has more than doubled this year.

We entered 2021 in a strong position. Whether our industry-leading products, digital solutions or investment approach, we remain confident that SALAMA can create long-term sustainable value for its policyholders and shareholders alike.”

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.

Last Updated on 3 years by Editor – PK