Dubai-listed Islamic insurer Salama was “technically insolvent” during 2022 but says it remains optimistic about long-term growth following a capital reduction and anticipated acquisitions, according to a filing on Dubai Financial Market (DFM).

In its 2022 financial reports published today to DFM, the insurer said it had “resolved solvency position in Q3-2022 after being technically insolvent as a result of disqualifying assets (under legal cases)”. Changes in relation to the admissibility of qard-al-hasan – Islamic loan collateral free loans, also impacted, the company said.

“The Central Bank of the UAE’s guidance and support were instrumental to SALAMA in terms of capital strength and solvency,” the financial statement added.

Salama’s accumulated losses reached AED 376.4 million as of December 31, 2022, 31.11% of capital ratio, after a net profit of AED 42.5 million ($11.57 million), down from AED 48.1 million in 2021.

The company saw underwriting income of AED 1.118 billion, up from AED 1.088 billion in 2021.

A capital reduction last month saw Salama write off accumulated losses by cancelling 270 million shares at a value of one dirham per share.

(Writing by Imogen Lillywhite; editing by Daniel Luiz)