H.E. Dr. Ali Saeed bin Harmal Al Dhaheri, Chairman of the Board of National Takaful Company “Watania”said that the Company has approved a dividend payment of 5% to the shareholders for the first time since its inception, and this should give confidence to the shareholders that their investment and patience is bearing fruit.
Speaking in and official press statementH.E. Dr. Al Dhaheri said that the Company has stayed faithful to its ‘back to basics’ approach that it adopted since the change in its business strategy in 2016. This strategy is built on 3 pillars comprising of smart segmentation of its customers and competitive pricing, customer service that is consistent and continues to exceed expectations and the final pillar of skilled and well-trained employees who are committed and motivated. The Company has been able to execute this strategy successfully and it has resulted in growth in business and profitability from its core takaful operations and investment.
“The growth in net profit in FY2018 was due to improvement in our Takaful operations with contributions from Motor and Medical leading the way. Our investment income remained flat as the equity market was depressed and the real estate income was also under pressure. It is important to mention that like the whole of UAE insurance market we were also hit by the transition VAT which is the tax amount that Company had to bear in respect of takaful policies issued in 2017 that expired in 2018. This amount could not be recovered from retail customers.
Chairman of the Board of Watania clarified: “The Company has approved a dividend payment of 5% to the shareholders for the first time since its inception. This should give confidence to the shareholders that their investment and patience isbearing fruit. The Board and the Management’s priority will be to maintain that confidence. The Company has maintained a responsible approach towards growth where profitability has been the critical driving factor. In view of some of the business challenges facing the market the Company will continue to be careful in the way its business grows. An important factor in Company’s profitability has been its control of operating expenses. The Board and Management are committed to maintaining this discipline. Investments have been made on technology so that we can increase our efficiency and productivity and we will continue to be innovative to bring down our expense ratio”.
“The insurance industry will undergo a significant transformation with the implementation of new accounting standards IFRS17 and IFRS9. For the benefit of our shareholders and prospective investors our Company has put in place a robust program to ensure a successful transition which encompasses not only its business and accounting process but its business strategy as well”, he added.
In his comments on the performance of the insurance sector in the country, Al Dhaheri said: “The insurance market in UAE is going through challenging times. The growth in 2018 was less than 1% compared to double digit growth rates in the past. While the market continues to be profitable but the pressure on pricing is becoming quite obvious as 62 companies in UAE try to maintain their market share. This will invariably lead to strains in profitability and we expect this to become evident sooner than later. I would like to take this opportunity to complement the rules and regulations initiated by Insurance Authority in bringing about greater level of transparency and governance in the insurance sector.
Commenting on the future plans, the Chairman of the Board of Watania said: “The Company has identified two core product lines to drive its business strategy. These products are Medical and Motor. The company will continue to develop and increase its penetration through better service and competitive pricing for the right segment. The Company also intends to differentiate itself by expanding coverage that is relevant and beneficial for its policyholders. As a Takaful company it is important to address the needs of the policyholders and it can do that by providing protection which may not be easily available in conventional products. The Company also provides protection in property, engineering and other classes of risk. Company’s investment strategy focuses on real estate and subject to the investment limits set by the Insurance Authority we are always looking for real estate investment opportunities that provide good and stable yield”.
The Chairman of the board of Watania Takaful ended his speech by saying: “Our progress so far has been in line with the 3 years’ strategy that was adopted in 2016. We are now moving into the next phase of our business that will focus on maintaining profitability and stable return for the shareholders. We are demonstrating that by declaring dividends for the first time since Company’s inception. Our plans are now to build on this success and ensure that we achieve our vision and mission of being the leading Takaful company where leadership is defined in terms of returns for all the stakeholders. All business goals come with challenges and with challenges come opportunities so our strategy will be to seize those opportunities.
