Salama looks at buying distressed firms to expand

Salama, the largest takaful and re-takaful company in the world, is looking at buying distressed firms to expand.

"The prospects of expansion are actually more in the current situation. There are good acquisitions to be made as prices are depressed. We see a lot of opportunities to acquire and target companies at very attractive prices. Acquiring distressed companies is a part of our expansion plan but they should be good quality assets," Dr Saleh Jamil Malaikah, Vice Chairman and CEO of Salama, told Emirates Business.

Malaikah said the company has enough money to fund its ambitions and it was not looking at raising capital. "Salama is well capitalised for acquisitions. We grew by 42 per cent in 2008 and I expect we'll be close to that in 2009," he added.

With enough cash in hand, the company is not looking at reducing its human resources. On the contrary, it is increasing its head-count to keep up with its expansion.

Malaikah believes underwriting losses have nothing to do with the current economic crisis. "Losses are related to natural hazards, probability of disasters, fire etc. It is not related to the economic cycle. If we continue to do what we've been doing technically, (which we've done very well historically) we expect 2009 to be the same."

However, Salama does not give any bankruptcy cover to businesses and cover for being laid-off in individual cases. "That's not part of Salama, we don't cover credit loss and it's not on our plate," Malaikah said.

The company is also looking at buying back shares. "We have taken approval to buy back 10 per cent of our shares and we did buy some. The decision to continue buying is monitored on a daily basis and according to a set of rules and guidelines. Off hand, I believe we have already bought one-two per cent of our shares but this is a rough figure,' he said.


Takaful solution

Salama yesterday announced an initiative with Nexus Insurance Brokers to launch Business Protector – a takaful solution for business.

The product is designed to provide an impetus to small and medium-sized enterprises (SMEs) as well as large corporations in a challenging economic scenario. The Business Protector offers tailored coverage that fit into a company's risk perceptions and business models in an affordable and adequate manner.

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