News Middle East20 Jun 2019

Saudi Arabia:Several insurers under capital pressure

| 20 Jun 2019

Many insurers in Saudi Arabia are facing capital pressure. Nineteen (19) out of over 30 insurers operating in the market maintained shareholders' equity higher than the paidup capital at 31 December 2018, according to data compiled by Arabian Shield Insurance.

In its report entitled “Saudi Insurance Market 2018”, Arabian Shield notes that this number was lower than the 20 insurance companies that ended 2017 with shareholders’ equity higher than the paidup capital.

The report says that although many insurers are still burdened by accumulated losses. Some of them though showed signs of recovery in 2018 and reported reasonable profits that improved their equity-to-capital ratio compared to the previous year.

In the past few years, several insurance companies received regulatory approval to reduce their capital in order to write off some of their accumulated losses. Many others increased their capital through rights issues or by capitalising available retained earnings.

Most of the insurers will still be under pressure because the Saudi Arabian Monetary Authority is considering plans to increase the minimum capital of primary insurers, from SAR100m ($26.7m) to SAR500m. Few currently meet the proposed new threshold.

The insurers with their capital and equity positions at 31 December 2018 are:

#

Insurer

Capital

SAR m

Shareholders'

Equity SAR m

%

Companies with shareholders’ equity to capital ratio equal to or more than 100%

1

Bupa Arabia

1200

2574

215

2

Al-Rajhi

400

768

192

3

Buruj

250

454

181

4

Trade Union

275

432

157

5

Walaa

440

671

152

6

Tawuniya

1250

1899

152

7

Chubb

200

293

147

8

Arabian Shield

300

428

143

9

Al Ahli

167

235

141

10

AXA

200

268

134

11

Allianz

450

590

131

12

Watanya

200

240

120

13

Jazira

350

398

114

14

Gulf Union

150

167

112

15

SAQR

400

442

110

16

SAICO

300

321

107

17

Salama

250

264

106

18

SABB

340

346

102

19

Solidarity

250

251

100

Companies with shareholders’ equity to capital ratio below 100%

1

Alamiya

400

387

97

2

Arabia

265

251

95

3

UCA

400

361

90

4

Malath

500

450

90

5

MetLife

180

154

85

6

MedGulf

800

672

84

7

Tokio Marine

300

246

82

8

Gulf General

200

159

80

9

Al Ahlia

160

123

77

10

ACIG

200

138

69

11

Amana

140

96

68

12

Enaya

100

56

56


Source: “Saudi Insurance Market 2018” by Arabian Shield Insurance

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