Two talks are being held on mergers involving four insurance companies, but the discussions are still in the initial stages, Dr Fahd Al-Shathri, deputy governor of the Saudi Arabian Monetary Agency (SAMA), has said.
"The consolidation of the insurance market will be positive for the sector, because it will result in entities that are able to respond to the requirements of the current situation with regards to the development of the economy,” he said.
He pointed out that the insurance sector's contribution to the GDP has not reached the level desired by SAMA. In general, though, the sector is on track and is a pillar of the financial sector, Al Aabiya quoted Dr Al-Shathri as saying. No names of the insurers involved were mentioned.
He explained that the sector is different from others as it has different requirements and requires a large amount of capital because of the risk undertaken. He added that SAMA is currently reviewing the system of monitoring insurance companies.