Dubai - Mubasher: The shareholders of Islamic Arab Insurance Company (Salama) have approved a capital reduction at the general assembly’s meeting on 16 October, according to a press release.

The capital reduction aims to offset accumulated losses and cancel treasury shares, while strengthening the company’s diversified portfolio and supporting sustainable growth.

After securing regulatory approval, the DFM-listed company will issue up to AED 175 million in Mandatory Convertible Sukuk to selected strategic investors via a special purpose vehicle.

The transaction will strengthen Salama’s solvency, regulatory capital, and balance sheet in line with the Central Bank of the UAE’s (CBUAE) requirements.

Mohamed Ali Bouabane, CEO of Salama, commented: “Looking ahead, our focus will remain on generating tangible value for shareholders by maintaining strong underwriting discipline, optimizing our expense base, strategically deploying capital and delivering superior claims service, ensuring Salama remains a simpler, leaner and more resilient organization.”

S&P Global Ratings affirmed Salama’s long-term rating at ‘BBB-’ with a developing outlook, highlighting its stronger capital position.

In the six-month period that ended on 30 June 2025, Salama logged AED 8.24 million in net profits, an annual plunge from AED 20.53 million.