Islamic Arab Insurance PSC : Financial statements for 31 Dec 2016

Islamic Arab Insurance Co. (Salama)

and its subsidiaries

Directors' report and consolidated financial statements

for the year ended 31 December 2016

Islamic Arab Insurance Co. (Salama) and its subsidiaries
Directors' report and consolidated financial statements
for the year ended 31 December 2016
Contents	Page
Directors' report	1 - 3
Independent auditors' report	4 - 10
Consolidated statement of profit or loss	11
Consolidated statement of profit or loss and other comprehensive income	12
Consolidated statement of financial position	13
Consolidated statement of cash flows	14
Consolidated statement of changes in equity	15 - 16
Notes	17 - 76

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ISLAMIC ARAB INSURANCE CO. (P.S.C.)

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Reg1strat1on No (17) under Federal Law No. (61 of 2007

We present 37th Annual Report together with the audited consolidated financial statements for the year ended 31 December 2016.

We are proud to announce that during the year 2016 SALAMA has won "Best Family Takaful Operator - ME" Award at Islamic Business & Finance Awards, which was announced at the award ceremony, attended by over 200 Islamic bankers and financiers from around the world. This award is a testimony to SALAMA 's strong foundation and values on which the Family Takaful Business is built, always keeping customers at the heart of the business. Last year we have received "Family Takaful Company of the year" Award from MIIA (Middle East Insurance Awards).

SALAMA apart from operations in UAE, do have many sustainable operations conducting Islamic insurance in their respective regions. In the year 2016 our operations across the region have recorded tremendous growth in their net profits, it rose to AED 57 MN from AED 22 MN last year. However, this is despite the fact that during the year our operations in Egypt and Algeria have suffered huge foreign currency setback against US Dollar.

The consolidated net loss during the year 2016 is due to discontinued operations of BEST RE and losses in Motor portfolio in UAE. Motor portfolio in UAE by its very nature is highly competitive and volatile, like last year the motor insurance business faced many challenges leading to losses for many operators in the market.

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Reg,strat,on No 117i under Federal Law No. (6) vf 2007

Going forward with the help of new and more stringent insurance regulations it is expected that insurance sector in UAE will see improvement that will benefit both companies and policyholders.

SALAMA has been able to achieve market leadership in many segments and has grown continuously and organically with stronger partnerships and distribution channels. Rest assured SALAMA is strong and seasoned to weather cyclical losses without impacting its growth strategy.

SALAMA's net shareholders' equity as of 31 December 2016 is AED 710 million which is substantially larger than other operators and higher than the minimum regulatory requirement.

The following are highlights from our consolidated financial statements for years ended 31 December 2016 and 2015:

2016

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2015

AED '000

Gross written contributions	777,612 " },; ,	933,346
Contributions earned	.599,382	699,854
Incurred claims	455,850
Net UW (loss) I income	56,228
Investment income	18,914
Net loss for the year	(162,840)

SALAMA remains strong and resilient in face of short term challenges. We are very confident that after drastically reducing UAE motor business, we will be able to improve its temporary situation and yield better results from this segment. While implementing corrective action for the motor business, SALAMA will continue to nurture other business

2

Head Office Claims Department Oud MethaBranch

Duba, - Spec rum Buolding DubJ1 Qu,;a1s n 4 Oamasrus St Dubai - Al Nasr Pla1a Building

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Fax. 04 3571.:118 Fax [phone] F,:1x 04 3572993

P.O.Box 10214 P.O Box· 10214 P.O Box10?14

Abu Dhabi Branch Al Ain Branch SharjahBranch

Abu Dhab DIB Bu1loin" Al Am Al Otab1a StreP' SharJnh- Mahnrab1 Building

Te! 02 6352577 Te! 03 7663996 Tel [phone]

Fax · 02 6314252 Fax a, 7669451 Fa:,,. "6 574..1552

PO Box 7688 PO Box 1623 O.Bn24811

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