The acquisition of AXA-Gulf by Gulf Insurance Group (gig) will strengthen the position of the Group at the regional level and boost its top line and profitability, says group CEO and board member Khaled Saoud Al Hassan.
The acquisition deal, announced last December, granting gig majority shares in AXA Gulf, will take gig to a new level and fortify its leading position among the region’s insurance providers, said Mr Al-Hassan in a recent webinar organised by the General Arab Insurance Federation (GAIF).
He expects the move to increase the premiums of the group to US$2.3bn by the end of 2021, up from its current $1bn volume, while profits are estimated to be around $100m. “We expect to complete the acquisition by the second or third quarter of this year after obtaining the necessary regulatory approvals,” he said.
Mr Al-Hassan expressed satisfaction with the outcomes of the deal as it grants gig access to new markets including Oman and Qatar. “(These are) new markets for gig. We wish to add value through introducing new products or support the existing services in these markets.”
He said that 20 years ago, gig’s parent company Kuwait Projects Co (KIPCO) holding, had outlined the group’s strategy to expand into new markets beyond its base in Kuwait, which is a very competitive market that offers limited space to achieve the group’s growth ambitions. “We were able to show a presence in over 11 Arab markets. Our strategy is built on maximising (the group’s) shareholders' returns and improving technical profits with specific targets for loss ratios.”
Today, gig Kuwait represents around 50% of the group's revenues and the remainder comes from the other subsidiaries in MENA and Turkey. Mr Al-Hassan observed that acquiring AXA has been the biggest move for gig.
gig is considered the most active Arab group in the M&A field as it conducted deals in Kuwait, Bahrain and Turkey. Fairfax is among the group’s main shareholders with a 43% stake.