Islamic Arab Insurance Company (Salama) is moving ahead with a major capital restructuring plan after shareholders approved measures designed to bolster solvency and align with the Central Bank of the UAE’s regulatory requirements.
During its General Assembly on Oct. 16, shareholders voted in favour of reducing the company’s capital to offset accumulated losses and cancel treasury shares. Once approved by the Securities and Commodities Authority, Salama plans to issue up to AED 175 million in Mandatory Convertible Sukuk (MCS) through a special purpose vehicle. These Sukuk will be later converted into new shares.
Salama Group CEO Mohamed Ali Bouabane said the plan was a key step in strengthening the company’s financial position.
“The approval of our capital restructuring plan marks an important step toward strengthening Salama’s balance sheet and meeting all regulatory capital requirements. The continued support of our shareholders and strategic investors reflects strong confidence in the company’s fundamentals and long-term stability,” Bouabane said, adding that the company’s focus will remain on “generating tangible value for shareholders by maintaining strong underwriting discipline, optimising our expense base, strategically deploying capital and delivering superior claims service.”
Salama said the new capital will not only help meet solvency requirements but also support its diversified Takaful portfolio across different markets and product lines, allowing for more stable and sustainable growth.
Financial results from the first half of 2025 show gradual improvement. Total equity rose 5.2% to AED 351.84 million compared to the previous year, while net profit reached AED 8.25 million and Takaful revenue totalled AED 515.36 million as of June 30, 2025.
Reflecting this progress, S&P Global Ratings affirmed Salama’s long-term issuer credit and insurer financial strength rating at “BBB-” with a “Developing” outlook.
