National Takaful Company (Watania) has announced that its net profits for the first nine months of this year have increased by 78% to AED17.8m ($4.9m) compared to the corresponding period last year.
Watania chalked up underwriting profit of AED42.7m for the first three quarters of this year, 43.6% higher than for the corresponding period last year. Investment income dipped marginally to AED5.3m from January to September from AED5.4m for the corresponding period in 2019.
Dr Ali Saeed Bin Harmal Al Dhaheri, chairman of Watania, said, “In spite of a depressed and volatile investment market, the company maintained its investment income at the same level as the previous year, and was able to reduce its loss ratio from 63% in 2019 to 56% in 2020, and at the same time maintaining tight control over its expenses.”
The combined ratio improved from 97% in 2019 to 92% in 2020.
Watania achieved the profits despite a decline of 7% in gross contribution to AED243m in the first three quarters of this year, the company says in a statement.
Indeed, the insurance sector as a whole has been affected by the COVID-19 pandemic. Business growth has slowed and this is expected to continue for some time, says Watania. However, Watania is expected to perform well in terms of profitability because of its judicious approach to conducting business and managing costs.
At the same time, the market has experienced reduced claims activity in all classes of business which has resulted in profit growth in insurance operations. Companies have had to change their business process to keep their employees and customers safe.
Dr Al Dhaheri said, “We have adopted technology in a way that was not thinkable a year ago. We are still gauging the impact of COVID-19 in terms of our future prospects. We expect the growth to be impacted till the pandemic is brought under control. On the other hand, we also believe that positive learnings from adapting to new ways of doing business will help innovation, reduce costs and maintain profitability,” he said.
In 2017, Watania identified the mid-segment of the market as part of its core business strategy. Dr Al Dhaheri said, “Creating a digital platform to provide access to distribution and deliver service to business partners and customers was an integral part of this strategy, so we had already invested in digital services. At present, the company can provide all its services without the customer having to visit its offices. At the same time, the company appreciates that some of the employees and customers may need to visit our offices. In order to provide them with a safe environment, all the protocols prescribed for screening, sanitising and social distancing have been adopted.”