Dar Al Takaful and Watania complete merger to create UAE’s largest insurer

Sharia-compliant insurers Dar Al Takaful (DAT) and National Takaful Company, better known as Watania, completed their merger to create the UAE's largest insurance provider after securing the approval of regulatory authorities and shareholders of the two companies.

Watania delisted its shares from the Abu Dhabi Securities Exchange on June 30 as part of the transaction.

Its shareholders received 0.734375 Dar Al Takaful shares for every Watania share they own, in line with the merger process.

The merged company, Dar Al Takaful, began trading on the Dubai Financial Market with a share capital of Dh260 million ($70.8m) under the ticker “DARTAKAFUL” on Monday, it said.

“Through the merger, DAT is strongly positioned to benefit from the realisation of significant cost and revenue synergies, reduced operating expenses and better IT platforms to expand its product offerings and geographical footprint, while maintaining its competitive edge in the market and enhancing its service excellence,” the company said.

The UAE insurance market is expected to grow at a compound annual rate of 4.1 per cent of between 2021 and 2026, accounting for 43.7 per cent of the GCC region's gross written premiums during the period, Alpen Capital said in a report in February.

“Expansion of compulsory business lines, growing standards of regulation and supervision, as well as favourable immigration policies are likely to support its growth,” the report said.

The overall GCC insurance market is projected to hit $31.1 billion in 2026, from $26.5bn in 2021.

It has experienced greater consolidation through mergers and acquisitions because companies were “compelled to renew their focus on building resilience and rethinking their risk management strategies”, the report said.

“Our merger brought together two successful businesses to form a Takaful insurance powerhouse able to leverage economies of scale to develop innovative Islamic insurance solutions in ways the market has yet to see,” said DAT chairman Ali Aldhaheri.

“DAT will focus on deepening our customer reach and activities across the UAE, while also seeking opportunities to take our expertise overseas, particularly into the fragmented GCC market.”

Gautam Datta will continue in his role as the chief executive of DAT after the merger.

“The Takaful/insurance industry is on a growth trajectory as the region emerges into a new era following the worst impacts of the pandemic,” Mr Datta said.

“We are building a strong, scalable and adaptable business model that … will be able to meet the changing demands of customers and the overall market.”

Emirates NBD Capital acted as the sole financial adviser while Hadef and Partners acted as legal advisers to Watania and Ibrahim and Partners acted as legal advisers to DAT on the transaction.

KPMG acted as the sole valuation and financial due diligence adviser while Milliman acted as the sole actuarial adviser.