Dubai: The Dubai insurer Takaful Emarat returned a net income of Dh7 million and putting some distance from 2019’s Dh37 million loss. But it will still have to deal with accumulated losses that are now at 44.84 per cent of the capital. These losses now total Dh67.25 million.
But the company remains upbeat after taking on the COVID-19 infected 2020 with quite a bit of resilience. Much of that comes from confidence that its investments in new technology and online presence will pay off.
Takaful Emarat expanded “from selling its basic and enhanced health insurance online to developing a digital automated platform for its individual life insurance distribution partners to facilitate the paperless approach. In doing so, the company has succeeded in building a safe and productive work environment, the results of which are clearly visible in the financial results for 2020.”
On the expenses side, it was able to cut out 30.6 per cent to Dh60.5 million from Dh87.2 million in 2019. Gross written contributions were Dh614 million by end 2020 compared to Dh606 million a year ago. Net Takaful income was Dh80.8 million, again a gain on 2019’s Dh77.5 million.
“These results follow a comprehensive restructuring during which the company maintained salaries and benefits for all employees,” it said in a statement.
The accumulated losses, meanwhile, were primarily brought on by the medical insurance portfolio underperforming in 2019 due to “reduced margin and higher medical claim expenses than expected”.
Investments too generated lower returns. Takaful also said that in 2017 and 2018, it also incurred expenses related to the digitizing of its sales and operations processes. “Some of these investments did not yield the desired output leading to writing off these investments during 2019. All measures have been taken to reduce general and administrative expenses.
"Further work is underway to take other measures such as reviewing the underwriting guidelines and portfolio losses with a view to pricing modules appropriately.”