Shariah-compliant insurer Watania International Holding (WIH) returned to profitability in the first half of 2024, reporting a Dh7.9-million net profit—a significant improvement from the Dh3.9-million loss recorded in the same period last year—despite the effects of the extraordinary rains that occurred on April 16.
“The exceptional April rainfall event, which the UAE hadn't experienced in over 75 years, marked a critical point for the insurance sector. We successfully absorbed the majority of the large, one-time claims resulting from this event during the first half, maintaining our profitability thanks to the better-than-expected performance of other Takaful business lines and our strong risk management framework,” stated Dr Ali Saeed Bin Harmal Aldhaheri, WIH's chairman.
In 2020, Dar Al Takaful merged with Noor Takaful, and in July 2022, National Takaful Company (Watania) combined with Dar Al Takaful to form one of the UAE's largest Takaful entities. In March 2023, Dar Al Takaful rebranded to Watania International Holding, transitioning from an insurance to an investment holding company focused on expanding through Sharia-compliant investments in Takaful and Islamic finance.
Following the April rains, WIH and other industry participants saw significant increases in claims, particularly in motor and property insurance. Takaful revenues fell to Dh389 million during January-June 2024 from Dh457 million in the same period last year, a decrease of nearly 15%.
Aldhaheri expressed cautious optimism for the rest of the financial year, citing ongoing improvements in financial and operational performance and a more stable balance sheet. “The turnaround we accomplished towards the end of 2023 strengthened our balance sheet, supported by continuous enhancements in the financial and operational performance of our Watania Takaful subsidiaries. These improvements in operations and underwriting allowed us to better and more quickly assist our customers after the heavy rains in April. Over the subsequent five weeks, Watania Takaful processed 100% of the claims submitted, with most completed within half the usual time, and no motor claims were rejected,” explained Gautam Datta, CEO of WIH.
“Our operational profits held steady despite the expected substantial impact from the one-time claims due to the extreme weather event, especially on motor and technical lines. This was largely mitigated by the improved performance of the Medical and group Family (life) Takaful segments, disciplined underwriting practices, and better pricing post-rains. Despite challenging market conditions, our net profit for the first half continued to grow, driven by increased underwriting earnings across several Takaful business lines,” Datta added. He anticipates a positive outlook for the remainder of the financial year.
