UAE: Takaful Emarat board proposes $13.6m capital reduction
Source: Middle East Insurance Review | Oct 2022
The board of Dubai-based Islamic insurer Takaful Emarat has agreed to reduce the company’s issued share capital by AED50m ($13.6m) to write off accumulated losses.
The company’s accumulated losses as of 30 June 2022 stood at AED80.36m. At present, the company’s issued share capital comprises 150m shares with a nominal value of AED150m.
In its recent stock market announcement, Takaful Emarat said that its board would recommend the capital reduction to the company’s general assembly, subject to approval from the Central Bank of the UAE and the Securities and Commodities Authority.
The operator explained the accumulated losses in August 2022 when it released interim financial results.
Takaful Emarat CEO Wael Al Sharif said in a statement lodged with the Dubai bourse, “During 2019, the medical insurance portfolio recorded losses due to reduced margins and incurred higher medical claims expenses than had been expected. Investments generated lower returns during the period. Furthermore, the company historically had invested in technology to digitise its sales and operating processes. However, some of these investments did not yield the desired output, leading to the writing off of these investments in previous periods. The company’s profitability has also dropped due to the decrease in medical business.”
Mr Al Sharif added that all measures have been taken to reduce general and administrative expenses in addition to indirect business expenses. The company is also pushing the sales team and taking other measures such as reviewing guidelines and portfolio losses with a view to pricing products appropriately. M