JEDDAH: Saudi Arabia’s Allied Cooperative Insurance Group. (ACIG) plans to increase its capital by 150 percent in the first-quarter and expects to turn profitable by 2011, its top executive said. “I expect (profitability) in 2011,” Omar Hafiz, chief executive of ACIG, told Reuters in an interview.
The company plans to increase its capital to SR250 million ($66.7 million) from SR100 million after incurring losses in its first two years through a rights issue, as it plans to get involved in reinsurance operations. “We witnessed some losses because of late operations so now our capital is reduced to a limit in which we cannot do a lot of business so we have to increase our capital to do more business in addition to the reinsurance operations,” Hafiz said.
The company is awaiting approval from the central bank and the regulator Capital Market Authority and expects to complete the capital increase by the first quarter, or the second quarter at the latest, he said. There are more than 30 insurance companies in Saudi Arabia, 25 of them listed, seeking to tap into a population of 25 million. The companies’ operations are sometimes delayed as they await permits to sell various insurance products after receiving their business license.
The company posted a net loss of SR17.6 million for the first nine months of 2009, up 68 percent from a year earlier, according to the latest results posted on the bourse website.