Takaful News - Saudi Arabia: Regulator sets timetable for loss-making insurers to restructure operations
Source: Middle East Insurance Review | Jul 2016
The Saudi Arabian Monetary Agency (SAMA) has asked insurance companies which posted accumulated losses exceeding 50% of their capital to formulate a restructuring plan instead of facing liquidation.
SAMA is granting a grace period of a year for the affected insurers to raise their operating performance, according to local media reports.
Investment services company Albilad Capital noted in a report that the equity-to-capital ratio for 10 insurance companies stood at above 1 at 31 December 2015 while 22 companies posted a ratio of less than 1, implying that two thirds of the insurance companies in the Kingdom suffered severe losses. Five of these insurers reported an equity-to-capital ratio of less than 0.5 at the end of last year.
A total of 19 companies in the insurance sector made profits while 14 companies suffered losses in 2015, the report said.