Robust Financial Performance
Watania International Holding PJSC (DFM: WATANIA; ‘WIH’ or the ‘Company’) has announced a remarkable turn-around in its financial performance for the first half of 2024. In that period, the net profit posted by the company was AED 7.9 million, against a loss of AED 3.9 million in the same period of 2023. This positive shift underlines that WIH has successfully navigated through challenging times and further epitomises the effectiveness of its strategic initiatives.
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Improved Operating Ratio and Underwriting Performance
The company’s combined operating ratio has fallen sharply to just under 100% from 107% in 1H2023. This was largely due to the solid performance of its Medical Takaful business and its Group Family or Life Islamic insurance segment. Adjusted for the exceptional one-off claims from heavy rains, COR further improved to 94%, with underwriting profits reaching AED 9 million during the period. This strong improvement is indicative of effective risk management and operational efficiencies.
Impact of April Rains and Strategic Response
According to Dr. Ali Saeed Bin Harmal Aldhaheri, Chairman of WIH, the rains in April were unprecedented and the strongest that the UAE had witnessed for more than 75 years. Moreover, this caused huge challenges for the insurance industry, leading to one-off large claims. However, WIH was able to absorb the financial impacts effectively due to a strong performance from other Takaful business lines alongside a well-structured risk mitigation framework. He maintained that the company has maintained a positive operating profit despite the rains that caused losses in the Motor and Property lines.
CEO’s Perspective on Business Turnaround
According to Mr. Gautam Datta, Group CEO of WIH, the successful business turnaround that ensued towards the end of 2023 contributed to a stronger balance sheet and continued improvements in the group’s financial and operational performance. Its Takaful subsidiaries showed remarkable resilience and efficiency in handling losses occasioned by the April rains. Within a record time of five weeks, Watania Takaful registered all the customers’ claims, with the majority of them processed at 50% of the usual time, without rejecting any motor claim. This phenomenal speed in addressing the customers’ claims underlines the commitment of WIH to customer service and operational excellence.
Positive Outlook for Second Half 2024
Looking forward, WIH remains cautiously optimistic about the remainder of the financial year. Continued improvements in financial and operational performance and a more stable balance sheet have buoyed the outlook for the company. WIH is looking to continue growth and profitability while nearing key strategic milestones. Successfully executing operational and underwriting improvements should position it to support positive performance on a go-forward basis and help build additional resilience through challenges in the markets.
In a nutshell, Watania International Holding’s first half of 2024 was strong, driven by operational efficiency and marked recoveries in net profit. That has totally streamed the firm down a good position for future growth. Massive levels of claims handling and improved metrics in operations identified the sound strategy of WIH for rendering its capabilities regarding sustainable growth.
