RIYADH, 21 February 2005 — The Saudi Arabian Monetary Agency (SAMA) has announced that the list of insurance companies posted on its website in Arabic pertains to those that have passed the first stage of the screening process. The exception is the National Company for Cooperative Insurance (NCCI), which has already obtained a license from SAMA.
According to a SAMA notification, other companies will be listed on a monthly basis as soon as they pass the first phase.
Meanwhile, three other companies have been prequalified for final screening under the Cooperative Insurance Companies Act. They are: Saudi-Indian Insurance Co; AXA Cooperative Insurance (AXA/Norwich Union Insurance Saudi Arabia) and Saudi United Cooperative Insurance Company (AMITY).
While a question mark hangs over the future of companies that have not yet completed the first stage, the Saudi insurance market has started moving toward mergers. The Life Insurance Corporation of India and the New India Assurance have set up a joint venture along with LIC International Bahrain and six other Saudi partners, including the Fawaz Al-Hokair Group.
Capitalized at SR100 million, the Saudi-Indian Insurance Co. (SICO) has 60 percent of its paid-up capital coming from the joint-venture partners. The remaining 40 percent will be raised through an initial public offering (IPO) once it receives final SAMA approval.
A market source told Arab News there will be a slew of IPOs once the prequalified companies receive the green light from SAMA. The benefits will spill over on both sides. For the market, this means a sizable access to funds that could help safeguard customers’ interests in the event of any claims arising. For shareholders, the IPO and subsequent stock-market movements will ensure transparency in the share market.
