Islamic Arab Insurance Company

SALAMA: a takaful group after recapitalisation

As of: FY2025 / Q1 and H1 2026

Islamic Arab Insurance Co. (SALAMA) PJSC is a Dubai public insurance group listed on DFM as SALAMA. It conducts general and family takaful under Sharia principles. It is not a bank: deposits, net interest margin and banking CET1 ratios are not appropriate measures of its core operations.

Three layers need to be distinguished: insurance operations, investment results and capital supporting obligations to participants. Higher net profit does not necessarily mean an equivalent improvement in insurance performance, and shareholder funding is not revenue. This profile combines detailed consolidated FY2025 and Q1 2026 information with the later official H1 2026 announcement, preserving the dates of each source.

How the insurance business works

As of: FY2025

General takaful covers property and other general risks, including motor, health, marine and engineering insurance. Family takaful concerns life protection and longer-term products; investments belonging to participants in unit-linked contracts are separately presented. Their size is not a measure of cash freely available to shareholders.

Performance depends on risk selection, pricing, claims, contract-servicing costs and retakaful, through which some insurance risk is transferred to reinsurers. Contributions received, accounting revenue and profit are different measures. Sales growth without an assessment of claims and reinsurance costs does not establish better economics; investment gains are likewise no substitute for sustainable insurance profitability.

Group structure and geography

As of: 2026-03-31

At 31 March 2026 the subsidiary note lists direct holdings in Bahrain’s Tariic Holding at 99.40%, Egypt’s Misr Emirates Takaful Life Insurance at 85.19%, Salama Takaful Insurance–Egypt at 51.15%, and Senegal’s Salama Immobilier at 84.25%. Salama Assurances Algeria is shown through Tariic at 96.98%. These are the percentages presented in the group table, not independently recalculated effective holdings.

Tariic is described as an intermediate holding company without commercial operations in Bahrain; Salama Immobilier has no takaful operations. Incorporation in a country does not by itself establish an insurance sales market there. Consolidated figures include subsidiaries and non-controlling interests and cannot be relabelled as results of the UAE parent alone.

Investors and renewed leadership

As of: Conversion 2026-04-24; board 2026-07-02

Eshraq Investments PJSC and Humana Holding Limited participated in the completed April 2026 conversion of AED155 million of Mandatory Convertible Sukuk. The disclosures identify them as strategic institutional investors and related parties. Subscription amounts, a transaction’s percentage of old capital and final post-issue ownership are not interchangeable; the sources used do not establish a complete current shareholder table.

The 7 July 2026 announcement confirms that Humaid Mohammad Obaid Alqutami was elected chairman at the 2 July meeting, with Fareed Lutfi Al Harmouzi as vice-chairman. Mohamed Ali Bouabane is identified as Group CEO. The former chairman’s signature in historical annual accounts is not evidence of current leadership.

2025: weak insurance service performance

As of: FY2025 compared with FY2024

FY2025 takaful revenue was AED1,004.990 million, but the takaful service result was only AED0.370 million, against AED25.617 million a year earlier. Net expense from retakaful contracts held rose to AED86.786 million from AED41.038 million. Revenue exceeding a billion dirhams therefore does not by itself describe the quality of insurance operations.

Group profit after tax was AED11.197 million, of which AED4.014 million belonged to SALAMA shareholders and the balance to non-controlling interests. Profit also included an AED28.761 million reversal of expected credit losses. This must not be recast as improved underwriting or recurring insurance fees. Participant and shareholder investment results are separately presented alongside insurance finance expenses.

From quarterly improvement to H1 2026

As of: Q1 2026 vs Q1 2025; H1 2026 vs H1 2025

In Q1 2026 the service result rose to AED14.000 million from AED7.154 million in Q1 2025, and group profit increased to AED13.960 million from AED0.385 million. Takaful revenue nevertheless fell to AED229.469 million from AED256.362 million. EY reviewed the IAS34 interim information; this was not a full audit. A comparison with the entire 2025 year is not a growth calculation.

The 17 August release reports H1 2026 profit of AED28.3 million versus AED8.2 million, service result of AED28.3 million versus a loss of AED1.9 million, and revenue of AED469.7 million versus AED515.4 million. At 30 June it reports 154% solvency and AED111.6 million surplus. These are rounded release figures, not precise quarterly-statement amounts.

Capital reduction and sukuk conversion

As of: Capital actions 2026-01-09 and 2026-04-24

The AED456.568 million capital reduction was intended to extinguish accumulated losses and cancel treasury shares, with DFM activation on 9 January 2026. It was a restructuring of capital, not earned profit or a cash distribution to investors. AED155 million of MCS proceeds arrived in Q1 and were shown as capital pending issuance; conversion followed on 24 April.

Conversion changes the share count and ownership distribution. Historical earnings per share cannot simply be carried onto the new capital base. The completion notice specifies a lock-up of the new shares until 20 April 2027. The completion notice and Q1 subsequent-events note differ by AED1,000 in the exact resulting share capital. That disputed exact amount and ownership percentages derived from it are not used here pending an updated-register reconciliation.

Solvency and the participants’ fund

As of: 2025-12-31 / 2026-03-31; preliminary quarterly solvency

The year-end 2025 disclosure showed an AED41.168 million Solvency Capital Requirement deficit and reported non-compliance with solvency regulations during the year. The preliminary calculation at 31 March 2026 showed an AED112.876 million surplus. This improvement coincided with receipt of new funding and cannot be attributed entirely to insurance profit.

Meanwhile the policyholders’ deficit financed by shareholders increased from AED202.086 million at year-end to AED207.173 million at 31 March. This takaful funding obligation is fundamentally different from a bank deposit. Positive total equity does not mean all capital is freely distributable. Subsequent reporting should be checked for recovery of the participants’ fund separately from earnings attributable to shareholders.

Liquidity: profit is not cash flow

As of: Q1 2026 / 2026-03-31

Q1 2026 operating cash flow was negative, with AED177.881 million used in operating activities. Capital proceeds and investment movements supported the overall cash balance. An increase in bank balances therefore cannot automatically be described as better collection of contributions or internally generated cash.

At 31 March bank balances and cash were AED318.721 million, whereas cash and equivalents in the cash-flow statement were AED278.327 million. The definitions differ and are not interchangeable. Statutory deposits, participant investments and retakaful assets are not freely available cash either. Insurance contracts dominate the group’s obligations; an industrial-company net-debt template would conceal payment timing and restrictions on assets.

Strategy, risks and follow-up questions

As of: Q1 2026; AGM2026-04-28

A practical test of recovery is a series of comparable periods with positive service results, understandable reserve development and cash collection. Relevant questions include not only losses on new contracts but revisions to prior-year liabilities, recoveries from retakaful counterparties and investment concentration. An unavailable combined ratio should not be replaced with a ratio of arbitrarily chosen statement lines.

Regional subsidiaries add currency risk: quarterly disclosures specifically discuss the Egyptian pound’s effect on equity translation. Changed ownership and support for the participants’ fund require attention to related-party dealings and resource allocation. The 28 April 2026 AGM approved no dividend for 2025. Improved earnings and solvency are important disclosed developments, not a promise of distributions or a share recommendation.

Contacts and information dates

As of: Contacts checked2026-08-30; email source2026-03-04

The official website is salama.ae, with financial documents under Reports and Notices. Head office: fourth floor, Block A, Spectrum Building, Oud Metha, Sheikh Rashid Road, Dubai; P.O. Box10214. Telephone: 800725262 within the UAE and +97143577000 internationally. The official 4 March disclosure publishes info@salama.ae; it is not represented here as a dedicated IR address.

Sources were checked on 30 August 2026. The detailed table retains FY2025 and Q1 2026 dates; newer half-year results are separately presented from the release without inventing a June balance sheet. This is an original business profile based on the disclosures used, not a company audit or assurance that every risk has been captured.

Sources

1. S1 · SALAMA FY2025 consolidated financial statements · 2025-12-31
2. S2 · SALAMA Q1 2026 reviewed consolidated interim financial statements · 2026-03-31; approved2026-05-15
3. S3 · SALAMA capital increase activation, 24 April 2026 · 2026-04-24
4. S4 · SALAMA H1 2026 results announcement · 2026-06-30; release2026-08-17
5. S5 · SALAMA chairman appointment announcement · 2026-07-07; appointment2026-07-02
6. S6 · SALAMA official contact page · 2026-08-30
7. S7 · SALAMA related-party transaction with Eshraq disclosure · 2026-03-04
8. S8 · SALAMA official reports and notices index · 2026-08-30