Watania Takaful reports AED 7.6 million net profit in 2017

Tuesday 06 March 2018
Abu Dhabi - MENA Herald:

H.E. Ali Saeed Bin Harmel Al Dhaheri, Chairman of the Board of National Takaful Company “Watania” said that the performance of Watania in 2017 has been very impressive. The company has achieved 36% year on year growth in gross contribution, it has achieved a net profit of 7.6 million compared to 400,000 in 2016, return on equity of 9% and the most importantly combined operating ratio of 97.5% bringing it down from 108% in 2016. This means Watania has achieved operational profitability and this will create a good sustainable foundation for future.

Major Sectors

Speaking during the official announcement of Watania’s 2017 results, H.E.Al Dhaheri said: “The Company has 3 main business verticals – Medical insurance, Motor insurance and General insurance that is made up of fire, engineering, marine, general accident and liability insurances. While all 3 lines of business contributed to the operational profitability the major drivers of the profit were Motor and Medical. As a portfolio both these products form 85% of our net revenue and we will continue to focus on these product lines”.

“The real key to our success was delivering on our promise consistently. This is what gives our customers and business partners the confidence to do business with Watania. We will be active in the areas of consistent service to the customers, ease of doing business using technology and innovating products that respond to customer’s needs”, he added.

Chairman of the Board of Watania clarified that the company will be launching many initiatives during the year that will differentiate Watania in the insurance and takaful market. These initiatives will be related to new products, new services, online benefits, loyalty programs for existing customers. We believe these initiatives will automatically lead to attracting new customers.

The future vision

ExplainingWatania future vision, the Chairman of the board of Watania said:“We are focusing on strengthening our position in the Takaful market. Our vision is to be a leading Takaful provider and that means being in the top 3 in terms of growth, profitability for policyholders and return on equity for the shareholders. To do this, we may consider investing into areas that support or add value to our core services and strategy. We will also be open to opportunities for acquisition if the synergy is right and the business is in line with our core strategy”.

Commenting on the performance of the insurance sector in the country, Al Dhaheri said:“The insurance sector had a very good year in 2017. Almost all the companies showed growth in business and net profits. This was due to compulsory medical insurance program in Dubai and increase in motor premium rates after the introduction of unified motor policy regulation and minimum pricing for Third Party policies. However, the investment profit was down due to poor performance of the stock market. Overall the insurance market did very well in a difficult economy”.

Optimism and growth

Explaining his prediction for future for the UAE insurance market, Al Dhaheri said: “We are optimistic about the future of the market. We believe the stability in the oil price, the vision of the country and the revival of the global economy will have a positive impact on UAE,”

“The insurance market is projected to grow at 10% or above. However, there are several challenges that market poses in front of the companies – VAT amount payable in respect of transition policies issued in 2017 will create a challenge in recovery from the customers, the solvency capital requirement that comes into effect from 2018 will drive some companies to look at mergers and almost all the companies in the market will have to meet the challenge of digitization and online distribution. Many insurance companies have legacy systems and they will have to invest in switching to new technology”, he added.

“A company that is agile, forward looking and can take advantage of information systems and data analytics tools will have the competitive edge”, he clarified.

Confident of the future

The Chairman of the Board of Watania Takaful mentioned that the company like all startups, had its share of losses in the early years. This resulted in erosion of capital in the early years.

Adding: “The accumulated deficits must be wiped off before the Company has the retained earnings to distribute dividends. However, we are confident of Watania’s future and are considering number of options that will allow the Company to distribute dividends starting 2019. We will keep the market and shareholders updated of any decision once it is made by the Board of Directors”.

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