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Mar 2021

Saudi Arabia: More mergers on the horizon

Source: Middle East Insurance Review | Jan 2021

Saudi Arabia’s insurance sector is expected to witness more mergers in 2021, said Mr Abdullah Al Towaijri, head of the Insurance Companies Control Department at Saudi Central Bank (SAMA).
 
Mr Al Towaijri noted that the insurance sector has reached a stage of maturity wherein it recognises the need for the consolidation of capital, according to a report by Argaam.
 
A merger is a feasible option for small-cap insurers to raise their capital, he said, adding that it is also an excellent option through which to form stronger financial entities amid a large number of players in the market.
 
The insurance sector is relatively new in the kingdom and lacks competency. Given the many players in the sector, the available competencies are scattered, Mr Al Towaijri said.
 
Mergers help to concentrate the competencies and create more financially solvent entities that offer better and innovative services and products, he added.
 
The latest merger announced in the market was between Gulf Union Cooperative Insurance and Al-Ahlia Cooperative Insurance, according to statements issued by both companies to the Saudi stock exchange Tadawul on 6 December. M 
 
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