AED 2.95 million are community contributions to 21 insurance companies
A report by Emirates NBD on the financial statements and governance reports issued by the boards of directors of 21 insurance companies in the UAE showed that they recorded a community contribution of only AED 2,952 million during the fiscal year 2018, representing 0.27%
Emirates NBD's monitoring of the financial statements and corporate governance reports of 21 insurance companies in the UAE showed that they recorded a community contribution of AED 2.952 million only during the fiscal year 2018, representing 0.27% of its total net profit of 1.1 billion AED.
According to the monitoring, five companies announced no community contributions, while four companies did not specify the value of the contributions they made during 2018. One company, ADNIC, acquired about 40% of the total announced contributions of these companies.
Two managers in the insurance sector said that the percentage of community contributions to companies is weak and small compared to profits recorded by these companies, pointing out that some of the initiatives announced by companies can not be classified as necessarily a community contribution.
As a result of the published financial statements and governance reports issued by 21 of the 31 listed companies on the Dubai Financial Market and the Abu Dhabi Securities Market, Emirates NBD recorded a community contribution of AED 2,952 million only during the fiscal year 2018.
According to the monitoring, 12 insurance companies announced the value of these contributions, while five insurance companies did not provide any contributions, and four companies did not specify the value of their community contributions during 2018.
The companies, which did not specify the value, pointed out that their community contributions were focused on activities such as health awareness campaigns, participation in activities such as Earth Hour, blood donation, campaigns on social media related to road safety, For employees working in the private sector, issuing circulars related to energy conservation, in addition to contracting with recycling companies, and contributing to Al-Faraj Fund.
The figures showed that Abu Dhabi National Insurance Company recorded the highest value of the shares after it reached about 1.177 million dirhams, accounting for about 40% of the total announced contributions of companies. Al Ain National Company came second with AED 800,000, followed by Al Sagr National Insurance Company for AED 367,000.
The declared contributions of the insurance companies included in the table represented 0.27% of the total net profit recorded in the fiscal year 2018, which amounted to 1.1 billion dirhams.
"The societal contributions made by insurance companies are very small and very few," said Dr. Saeed Al Muhairi, executive director of United Gulf Insurance Brokers. "Insurance companies are closely linked to the products they offer in the local community, , It must make greater efforts in terms of contributing to the community in which it operates.
"There is a general perception of all companies, national and foreign, about their lack of effective participation in social activities," Al Muhairi said, stressing the importance that companies change this perception and offer innovative initiatives that benefit the local community.
He pointed out that some of the initiatives announced by the companies can not necessarily be classified as a community contribution, stressing the importance of defining and defining the contribution of the community accurately, to be mentioned and highlighted in the financial statements clearly under a special item.
In turn, the director of product development at RGA, Tamer Saher, agreed that «the announced contributions are small compared to the profits announced», pointing out that «the policies of contribution or community contribution vary from one company to another, and depends on the profits achieved Company ».
Saher explained that the boards of directors agree on the policy of distributing community contributions, and shareholders can also encourage contributions to insurance companies listed in financial markets.
"We do not know exactly the size of contributions to the insurance sector in foreign markets so that we can make a comparison," he said. "Donating and contributing to the local market is not mandatory, and each company has its own policy.
"There is no precise definition of a community contribution that takes many forms and does not necessarily have to be in the form of cash," Saher said. "Looking at the data, the insurance sector has performed well financially in 2018, but the ratio of contributions to earnings is weak," he said.