A halal insurance merger

A halal insurance merger

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In an attempt to consolidate market share in the UAE, Islamic insurance companies Dar Al Takaful and Watania have reportedly come to an agreement for a potential merger. Pending the approval of shareholders and regulators, the merger could happen as soon as the third quarter of this year.

Dar Al Takaful and Watania are no strangers. In May of 2020, Watania (which is listed on the Abu Dhabi Securities Exchange) purchased a 4.9% stake in Dar Al Takaful (traded on the Dubai Financial Market) worth about $1.6m. According to Watania, the acquisition was aimed at generating investment income from capital appreciation and dividends.

According to a joint statement from the two insurance companies, the merger will help Watania and Dar Al Takaful "consolidate market share in the highly fragmented UAE takaful market and build scale for the combined company.”

Why it matters

According to a report by Alpen Capital, the UAE's insurance market is expected to grow at a compound annual rate of 4.1% between 2021 and 2026. Watania and Dar Al Takaful believe they stand a better chance at capitalizing on this growth together than they do apart.

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