Dubai Islamic Insurance and Reinsurance Co (Aman) has announced that it will hold a general assembly meeting on 18 September to discuss developments in the company's loss management plan, that was approved by shareholders in February 2023, and the continuity of the company's operations.
Aman, listed on the Dubai Financial Market (DFM), incurred a loss of AED28.41m ($7.74m) for the year ended 31 December 2024. As of that date, the group had accumulated losses of AED181.41m, which represents 80% of the group’s share capital.
The group reported solvency deficits as of 31 December 2024, including a minimum capital requirement (MCR) deficit, a solvency capital requirement (SCR) deficit and a minimum guarantee fund (MGF) deficit of AED109.43m; AED28.41m and AED 26.43m, respectively.
To address the solvency deficits, Aman’s management initially submitted a recovery plan to the insurance regulator which involved a substantial capital injection by means of a rights issue; however, the plan was subsequently changed, because it was envisaged that shareholders were unlikely to support a capital injection in the prevailing economic and financial circumstances.
6 February 2023 loss management plan
Aman’s revised plan envisages selling the portfolios of the takaful business to other takaful companies and, aided partly by the proceeds resulting the sale of the takaful portfolios and partly by other assets, generating enough capital to transform the group into a viable investment firm to safeguard and preserve shareholders’ value. The group informed the regulator of this revised plans and received (in-principle/ no-objection letter) approval to proceed with the sale negotiations.
During the General Assembly meeting held on 6 February 2023, shareholders issued a special resolution approving the plan and the board of directors’ decision to exit and sell all the entire takaful portfolio and authorising the Group’s board of directors to complete all procedures with authorities and policyholders to exit takaful business and transform the group into an investment group.
Portfolio transfer agreements
Subsequently, Aman signed two portfolio transfer agreements (PTAs) with Islamic Arab Insurance Co (SALAMA) to transfer the general, medical, and family takaful portfolio and with Abu Dhabi National Takaful Co to transfer the individual life portfolio. The proceeds resulting from the execution of these agreements were expected to improve the group’s liquidity and generate enough capital to transform the company into a viable investment firm to safeguard and preserve shareholders’ value.
However, on 1 August 2024, management received a notice terminating the insurance portfolio transfer agreement between Aman and Abu Dhabi National Takaful Co. Aman’s management sent a formal objection letter to Abu Dhabi National Takaful Co, stating that it expected the portfolio transfer by 31 August 2024. On 5 September, Aman announced to the DFM that the PTA had not been validly terminated according to its terms and conditions. To protect the rights of all stakeholders, the Group has filed an arbitration claim against Abu Dhabi National Takaful Co and will provide updates on developments as they arise.
On 26 September 2024, SALAMA announced the termination of its partial acquisition agreement with Aman. Accordingly, on 27 September 2024, Aman declared to DFM that Salama decided to terminate the agreement. Aman is currently evaluating alternative strategies to address this development.
TPA
Further, the Group’s third-party administrator (TPA) and system provider for the individual life portfolio is now under liquidation in Germany. The TPA previously made certain investments on behalf of the group. These investments were made in sukuk unit-linked investments, a portion of which were issued by entities related to the TPA group without receiving prior approval of the group’s management and these entities are currently in liquidation. As a result, the valuation of these investments could be adversely affected by the liquidation process and this could potentially result in the group’s liabilities exceeding the value of the underlying assets.
Aside from discussing developments in the company’s plan to address accumulated losses, and approving the continuity of the company's operations, the agenda of the September 2025 general assembly meeting includes:
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Review and ratify the board of directors' report on the company's activity and financial position for FY2024.
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Review and ratify the report of the Internal Shariah Supervision Committee on the company's business for FY2024.
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Review and ratify the auditors' report for FY2024.
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Discuss and approve the the balance sheet and profit and loss account for the year ended 31 December 2024.
The consolidated financial statements for FY2024 were audited by Grant Thornton Audit and Accounting - Abu Dhabi, which said in its report on Aman’s accounts, “We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these consolidated financial statements.”
Aman, established in 2002, provides takaful coverage for motor, marine, fire, engineering, general accident, group life, credit life, individual life, and medical risks. The company obtained its commercial licence on 12 March 2003 and commenced operations on 8 April 2003.