UAE: Credit loss provision contributes to SALAMA's red ink in 2023
Source: Middle East Insurance Review | May 2024
Islamic Arab Insurance Company, listed as SALAMA on the Dubai Financial Market, posted a net loss of AED139.33m ($37.94m) for the 2023 financial year, compared to a net profit after tax of AED35.44m.
The net loss has been attributed to goodwill impairment of AED49.01m due to adverse macroeconomic factors and a provision for expected credit losses of AED83.29m, said SALAMA.
The company’s net loss also included a one-time loss of AED28.02m on account of a legacy fire insurance claim for which reinsurance was not recovered fully.
SALAMA reported a net loss despite posting takaful revenue of AED1.11bn in 2023, an increase of 20% over 2022.
The company had total assets of AED3.61bn as of 31 December 2023 compared to AED3.57bn in 2022.
SALAMA chairman Saeed Alhajeri said, “The year 2023 was focused on staying resilient in evolving market conditions. SALAMA remains optimistic and growth-oriented in a challenging business environment. As the UAE insurance industry sees the impact of new regulatory and industry developments, SALAMA is strengthening its foundation to leverage these opportunities and provide further value to our policyholders and shareholders.”
SALAMA CEO Walter Jopp said, “SALAMA is undergoing transformation, and we are focused on fortifying our balance sheet to ensure stability, transparency and sustainable growth. Our goal is to create a strong foundation that allows us to serve our customers better and drive long-term success.” M