Islamic Arab Insurance Company (SALAMA) Faces Financial Challenges Amid Strategic Shifts

Islamic Arab Insurance Company, known as SALAMA, recently released its interim financial statements for the first half of 2025. The report highlights ongoing financial challenges and strategic shifts aimed at addressing these issues.

Key Financial Metrics

Analysis of Financial Position

The company's accumulated losses as of June 2025 amount to AED 440,684,313, representing 46.90% of its paid-up capital. This is a significant increase from previous periods, driven by several factors:

• Provision of AED 288,467,043 taken in 2024 against qualified assets linked to ongoing litigation.
• Provisions of AED 28.02 million in 2023 against irrecoverable reinsurance share related to a large fire claim.
• Goodwill impairment of AED 49 million from subsidiaries in Egypt due to currency devaluation and inflation.
• Unrealized losses on shareholder investments amounting to AED 71.2 million in 2023.

Strategic Initiatives

SALAMA is actively pursuing strategic partnerships and digital transformation initiatives to improve its financial position. A notable collaboration with Policybazaar.ae aims to expand access to life Takaful insurance solutions in the UAE.

Conclusion

For investors, the current financial challenges present a cautious outlook for SALAMA. While the company is taking steps to address its accumulated losses and improve operational efficiency, the significant financial provisions and impairments highlight ongoing risks. Investors should closely monitor the company's strategic initiatives and market developments.