National Takaful Company (Watania) has announced a net profit of AED18.4m ($5m) in 2020, 40% higher compared to AED13.1m in 2019.
The growth in profit was driven by Watania’s focus on a ‘back-to-basics’ business model which comprises the “right products, right pricing backed by strong customer service through a team of dedicated professionals”, the takaful operator said in a statement.
Gross written contributions fell by 6.8% to AED344.8m in 2020, as compared to 2019, due to
challenging market conditions and economic slowdown. These led to reduced demand for core products of the insurer. Medical and motor business accounted for 89.3% of total gross contributions.
Investment income was nearly halved last year primarily because of real estate valuation loss. However, the equities and sukuk portfolio performed reasonably well.
Watania’s investment in technology ensured that there was no disruption in its services when the company switched to remote operations amid the COVID-19 pandemic. Customers were able to obtain help at all hours of the day when some key claims functions were moved online.
2020: Year of resilience
Watania chairman Dr Ali Saeed Bin Harmel Aldhaheri said 2020 had been projected to be the year when Watania would accelerate its growth and profitability, building on the momentum of the previous three years, taking advantage of EXPO 2020 and other economic developments planned in the country.
Dr Aldhaheri added, “The pandemic changed all of that and 2020 turned out to be the year of resilience where the company demonstrated its ability to deal with challenges effectively without impacting its commitment of service to customers. The investments the company had made in technology, streamlining of its business processes, data analytics and training helped to make a smooth transition to work-from-home. Thus, the company was able to maintain its volume of business and improve its margins through better cost management.”
He said that COVID-19 posed a real challenge. After moving to work-from-home, communications and engagement became essential to keeping employee morale high and providing the same level of service without the customer feeling the gap.
As for the future, Dr Aldhaheri is optimistic and expects a greater level of activity and innovation in life insurance or family takaful since the pandemic has increased the level of awareness amongst the public about the need for insurance to ensure financial security. M