SALAMA gets nod for GCC national shareholding

SALAMA Islamic Arab Insurance Company, the world's largest Takaful and Re-Takaful firm, has become the first UAE organisation in the insurance sector to receive Ministry of Economy and Planning authorisation to allow GCC nationals to own its shares.

The change, which came into effect on Saturday (February 11), is in line with a ground breaking UAE Cabinet decision to treat GCC nationals as locals in the country's stock markets and with the January approval by SALAMA's shareholders to allow equity ownership to be extended to GCC nationals.

"By being the first to ratify the GCC Summit decision to allow Gulf nationals to trade on any of the region's stock markets, the government has taken an important step towards the establishment of a common market. It will also ensure greater liquidity on the country's exchanges,"

said Sheikh Khaled bin Zayed bin Saqr Al Nehayan, Chairman, SALAMA Islamic Arab Insurance Company.

"We have moved quickly to implement this change. SALAMA has a history of market leading initiatives and has once again taken the lead among insurance companies.

"The fact that the company's activities are set to grow substantially over the next 12 months makes SALAMA a very attractive investment opportunity. Our strategy is to expand SALAMA's geographic reach and to diversify its income stream and product base to position the company to take advantage of the many emerging opportunities in the Takaful and Re-Takaful markets," said Sheikh Khaled.

In January, SALAMA announced a provisional 2005 net profit of AED 110 million (US $30.14m), up from AED 3.599m (US $1m) in 2004, in addition to a ground-breaking agreement with the MedNet Group - one of the world's largest reinsurance companies - to provide affordable Shariah compliant health insurance in the UAE. This will be followed by the launch of Life Takaful - a new personal insurance and saving scheme. Both products will be offered eventually in all markets in which SALAMA operates.

SALAMA expects global demand for Takaful and Re-Takaful products and services to grow significantly over the next five years. Market value is forecast to increase from US $1.7 billion to between US $7.5 billion and US $10 billion.

As part of its strategy for future growth, SALAMA has invested in developing its insurance products base in UAE and increased the capital of BEST Re - the world's largest Islamic reinsurance company - from US $55m to US $100m. It is expected the capital enhancement of BEST Re will help improve Standard & Poors (S & P) BBB "Good" and A M Best's B++ "Very Good" ratings. SALAMA also intends to set up a Dhs 1 billion Re-Takaful company in Saudi Arabia and a Dhs 100m Takaful business in Malaysia.

Other plans include an Initial Public Offering of shares in the Islamic Arab Insurance Company, Saudi Arabia, in which SALAMA will have a major stake. The company has already been incorporated and final approval for the IPO is awaited. SALAMA has also initiated a new Family Takaful company in Senegal, SOSAR Life, a sister company for SOSAR Aman, a subsidiary of SALAMA.

Other developments include the launch of Family Takaful in Algeria. In addition, SALAMA is finalising the procedures to establish a Family Takaful company in Egypt and has plans to launch a Family Takaful programme in the UAE.