$16.3m profits forecast for 2005, rising to $24.5m in 2006
Dubai-based Islamic Arab Insurance Company, the world's largest Islamic insurance company, will embark on a robust US $258.2 million expansion after it becomes the 27th company listed on the Dubai Financial Market on Saturday.
Details of the growth strategy were unveiled at an event held at the DFM, today, to mark the start of trading in the company's shares. It brought together representatives from Islamic Arab Insurance Company, SHUAA Capital, DFM, the Emirates Securities and Commodities Authority (ESCA) and prominent investors and brokers.
Sheikh Khaled Bin Zayed Al Nehayan, Islamic Arab Insurance Company's Chairman, said: "We are extremely pleased with the response we have seen so far to the public offering of our company's shares, and we firmly believe that our shares constitute a solid investment opportunity.
"Future prospects for the company are very positive. In addition to investing strongly in new markets we have identified important sector specific growth opportunities and we fully expect to deliver profits in the region of US $16.3 million this year, rising to US $24.5 million 2006."
Islamic Arab Insurance Company, incorporated in 1979, raised its paid up capital to US $271.7m in July through a public offering of 200 million shares, representing 20% of the total capital, which was oversubscribed by eight times. Lead Manager for the share offering was SHUAA Capital.
Khaled Sifri, Managing Director of SHUAA Capital's Investment Banking Group, said: "It gives us great pleasure to bring to the market yet another strong investment opportunity. We are very proud to have been involved in this transaction and we have high hopes for the company's future performance."
An established Islamic insurance and reinsurance company, Islamic Arab Insurance Company has six Takaful companies and provides services in 40 countries through BEST Re, the biggest Islamic reinsurance company in the world. Islamic Arab Insurance Company provides Takaful and Re-Takaful solutions to customers in the Middle East, Africa and Asia.
As part of its strategy for future growth, Islamic Arab Insurance Company will restructure its balance sheet by paying off US$95m of debt, incurred as a result of recent expansion. It also intends to invest US$45m developing its insurance products base, increase the capital of BEST Re by US$45m to help improve its its S and P's BBB "Good" and A M Best's B++ "Very Good" ratings and establish a US$27m Re Takaful company in Saudi Arabia and a US$15.76 Takaful business in Malaysia.
Other plans include the US$13.3m incorporation of the Islamic Arab Insurance Company, Saudi Arabia and US$8.7m investment in Egypt to set up a family Takaful company. A further US$5.3m has been allotted to family Takaful in the UAE and US$2.98m to incorporate, Sosar Life, a family Takaful provider in Senegal.
"The company is well placed strategically to capitalise on opportunities in the Takaful and Re-Takaful industry in the Middle East, North Africa and Asia Pacific," said Sheikh Khaled.
"The global Takaful market is expected to grow at between 15% and 20% per year, making it one of the fastest expanding financial industries in the world. Rapid population growth, insurance market reforms and increased demand for personal insurance cover are all helping to drive the growth. For example, the introduction of compulsory health insurance for expatriates in the UAE and elsewhere in the GCC will provide considerable sources of revenue.
"Another major business opportunity is life insurance. This sector is under developed in the Middle East and North Africa. We believe Takaful holds the key to unlocking this potential by providing life insurance through Family Takaful," added Sheikh Khaled.
Total worldwide Takaful premiums covering both non-life and life insurance are expected to reach US $7.4 billion by 2015. Of this, nearly US $2 billion in annual premiums is forecast to be written in GCC countries, US $3.1 billion in Asia Pacific and an additional US $2.6 billion in Europe, Turkey, China, India and the USA. Among Arab countries, Saudi Arabia is expected to generate close to US $900 million, followed by the UAE (US $480 million) and Egypt (US $467 million).
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About The Islamic Arab Insurance Company
The Islamic Arab Insurance Company, was established in 1979 with a paid-up capital of US $2.7 million with the purpose of providing Shariah compliant insurance services. The company became a Public Joint Stock Company in 1984, and is the world's largest Islamic insurance company offering a comprehensive range of insurance and re-insurance products across the globe. The Islamic Arab Insurance Company has one of the largest Takaful and the largest Re-Takaful network across markets in the Middle East, Africa and Asia. Following a Rights Issue and Initial Public Offering in July 2005, Islamic Arab Insurance Company has a paid up capital of US $271.7m.
About SHUAA Capital psc
SHUAA Capital psc, established in 1979, is a public shareholding company organized and headquartered in Dubai, United Arab Emirates. SHUAA Capital's shares are listed on the Dubai Financial Market and on the Kuwait Stock Exchange. The company provides asset management, portfolio advisory and brokerage services to investors interested in the 12 capital markets in the Arab World. It also manages a portfolio of private equity investments for its own account and on behalf of its clients. In addition, SHUAA Capital offers a broad spectrum of investment banking services to established companies in the GCC region.
About Dubai Financial Market (DFM)
Dubai Financial Market (DFM), was established as a public institution having its own independent corporate body. DFM is operating as a secondary market for trading of securities issued by public shareholding companies, bonds issued by the Federal Government or any of the Local Governments and public institutions in the country, units of investment funds and any other financial instruments, local or foreign, which are accepted by the Market. The Market commenced operations on 26th March 2000.
For further information, please contact:
Malcolm Ward
MCS/Action
Tel +971 4 3902960
Fax +971 4 3908161
Email: malcolm.w@actionprgroup.com
© Press Release 2005
