UAE: Watania posts positive 1H2021 financial results
Source: Middle East Insurance Review | Sep 2021
The National Takaful Company (Watania) has announced financial results for the first half of 2021, reporting a net profit of AED7m ($1.9m) and annualised ROE of 13.5% for 1H2021 against a net profit of AED16.6m in 1H2020.
Despite a decline in revenue in 1H 2021, overall profitability remained positive due to its overall investment income and positive underwriting operations.
The company’s chairman Dr Ali Aldhaheri said, “A recent S&P report has noted that very high competition in the overcrowded GCC insurance industry will continue to weigh on earnings in 2021. In spite of that, Watania demonstrated a disciplined performance maintaining its overall profitability and high ROE.
“Liquidity will remain a challenge in the current market but we are pleased to report an ROE of 13.5% that was buoyed by the strong performance of our investment portfolio, which rose to AED6.7m from AED3.9m in the same half of 2020, a growth of 71%. In spite of all the challenges, we were able to maintain positive underwriting results with a combined operating ratio of 99.6%.”
Other highlights of the interim results for 1H 2021 compared to 1H 2020 include gross written contributions reaching AED166.3m versus AED193.7m, claims ratio registering 63.1% from 54.4% and the expense ratio at 21.5% against 17.2%.
Looking ahead, Dr Aldhaheri said, “The insurance sector is impacted by constraints in the economy. We expect the pressure on growth to continue for the remainder of 2021. However, the company has continued to strengthen its infrastructure through innovative cost-effective changes in its service and delivery platform. There is an increasing focus on the customer feedback process and on improving its customer satisfaction index. These initiatives will help the company to recover at a faster rate when market conditions improve.” M