Watania Takaful net profit rises 74% to AED3.9 million in Q1

Abu Dhabi / Emirates Business

The National Takaful Company (Watania) on Monday announced financial results for the quarter ended March 31, reporting a net profit of AED 3.9 million which is an increase of 74% compared to the same quarter last year.
“Despite the challenges faced by the insurance industry, the National Takaful Company (Watania) delivered a strong financial performance in the first quarter of 2021 thanks to the improvement in underwriting and investment income”, said the company’s chairman Dr Ali Saeed Bin Harmel Aldhaheri. “We are pleased to see a healthy ROE of 15% driven by our investment income that rises to AED3.6 million from AED2.3mn in the same quarter of 2020, a growth of 67%”. He also added, “Strict underwriting discipline led to a lower claims ratio giving rise
to an increase in underwriting
income by 238%”.
While it’s expected that 2021 will be very challenging for the company in terms of growth in gross written contribution and constraints in liquidity, they are cautiously optimistic about their capacity to weather the aftermath of the pandemic and pleased with their team’s ability to adapt under pressure.
The company’s motor and medical lines of business are expected to remain under severe pressure due to very competitive pricing and high acquisition costs, but the team has made the necessary changes to the Medical & Motor product lines to maintain their profitability and continue to meet and exceed their customer’s needs in spite of a rapidly shifting business landscape.
Watania’s net claims loss ratio improved to 61.7% compared to 68.4% in the same quarter last year. The company’s combined operating ratio showed a marginal improvement at 99.3% due to increase in the expense ratio on account of negative growth.
As for the future, Aldhaheri remains optimistic, adding that, “despite a decline in gross written contribution compared to this time last year, we believe the worst impact of the pandemic on our business performance is behind us, and the company is well-positioned to deliver on its commitments to stakeholders.”
“We have demonstrated a strong performance with an increase in net profits, healthy ROE and a continued ability to retain customers by providing superior customer service,” he added.
The merger of the Insurance Authority with the UAE central bank will mean a greater focus on regulation and compliance. Aldhaheri believes that this will lead to a stronger financial services industry, providing a higher level of financial security to its customers.