Islamic Arab Insurance Co. dropped to the lowest level in more than a year after the Dubai-based company reported a 2012 loss linked to claims for flooding in Thailand.
Shares of the insurer known as Salama plunged 8.1 percent to 56.5 fils, the weakest level since January 2012, at the close in Dubai. Islamic Arab was the biggest decliner on a percentage basis on the benchmark DFM General Index, which lost 0.2 percent to 1,825.76.
Salama said it wouldn’t pay a dividend for 2012 after the insurance provider reported a loss of 394 million dirhams ($107 million) compared with a 60 million-dirham profit a year earlier. The losses were linked to claims filed for flooding in Thailand made to BEST RE, in which Salama owns a stake, it said.
“The company reported larger-than-expected losses as their technical profits took a hit from having to provide for the losses flood in Thailand,” Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities, said. Al Fajer had estimated a loss of around 50 million dirhams, he said.
The insurer was placed on credit watch by Standard and Poor’s in January on concern BEST RE’s capital adequacy may weaken further. Salama holds an A- rating at S&P, the seventh-highest investment grade. Shares of Salama have dropped 7.5 percent this year, underperforming a 13 percent advance for the benchmark gauge.