Dubai – Mubasher: The Dubai Islamic Insurance and Reinsurance Company’s (AMAN) annual general meeting (AGM) has approved the board’s recommendations to reduce the company’s losses and turn it to profitability in the coming years.
The AGM also reviewed and approved the board of directors' report on the company’s activities and its financial position during the financial year 2016, according to a statement released Monday.
Despite the slowdown in the global and local economies, which has been the worst since the 2008 global financial crisis, and posting losses last year, “AMAN still holds an advanced position amongst insurance companies due to its good reputation, transparency, and clarity in dealing with all regulatory bodies and stakeholders,” said chairman Mohammed bin Yousef Al-Muhairi.
AMAN succeeded in maintaining its stability in the insurance market, which suffered major challenges in 2016, prompting regulatory bodies to intervene to impose the correct technical basis at various levels to preserve the rights of both shareholders and contributors, he added.
The Dubai-listed company’s reserve has been increased to meet the insurance authority’s requirements, which cost an additional AED 13.8 million compared to the previous calculation method of reserves.
AMAN’s overall investment performance for 2016 logged an income of AED. 8.5 million against a loss of AED 30.8 million in 2015, the statement showed, noting that total mandatory reserves, legal and general, at the end of December 2016, reached AED 37.5 million.
The insurance and reinsurance firm reported AED 19.6 million in losses in shareholders’ equity in 2016 compared to a loss of AED 3 million for the year 2015. AMAN’s accumulated losses reached AED 118 million as at 31 December 2016, according to the statement.
“The reformative plan which aims to transfer AMAN to profitability in the coming years includes five angles that will reduce the company's accumulative losses and deals with capital adequacy, liquidity shortage and losses of its subsidiaries,” the company’s CEO Jihad Faitrouni said in a statement.
Some of the procedures will work on amending insurance prices, reduce general and administrative expenses, and pay more attention to increasing productivity in life insurance, he added, highlighting that both the legal and general reserves will be utilised to reduce AMAN’s accumulated losses to AED 78.6 million, representing 34.8% of capital.
“This is in addition to disposing of some of the non-productive and non-performing assets on the basis of preferable-vending depending on profitability for the company,” the statement added.
