Kuwait: Warba makes US$964K gain on sale of Kuwait Re stake
Source: Middle East Insurance Review | Nov 2015
Warba Insurance Company has made a profit of KWD291,100 (US$964,000) from disposing its entire stake in Kuwait Reinsurance, according to a company statement to the local bourse.
Warba exited its stake in Kuwait Re after selling 5.6 million shares for a total of KWD1.12 million, according to the filing. The transaction will be accounted for in the third quarter financials.
The buyer is reported to be Kuwait’s Al Ahleia Insurance, which increased its stake in the reinsurer to 92% from about 30%. The increase in shareholding beyond the 30% threshold triggered a Capital Markets Authority rule requiring the insurer to make an offer to all shareholders of Kuwait Re.
A.M. Best said that while the change in ownership is expected to have minimal impact on Kuwait Re’s operations over the short term, it will need to assess the financial strength of the new parent company. While Al Ahleia Insurance’s risk-adjusted capitalisation is deemed strong, “there may be some strain post-consolidation, given that net written premiums are expected to increase by approximately 270%. Additionally, A.M. Best will need to understand the strategic direction of the group and how the insurance and reinsurance operations will be integrated,” it said.
KWD1 = US$3.31