RIYADH, 10 March 2008 — A new insurance company, Saudi Reinsurance Company (Saudi Re), was formally launched in Riyadh on Saturday, with its top officials being bullish about the local insurance industry.
Mousa A. Al-Rubaian, chairman of the founders committee, told reporters that being the first Saudi reinsurer, Saudi Re has bright prospects and it may become one of the biggest players in the local insurance industry, which is estimated to be $1.5 billion annually and is expected to reach $8 billion within 10 years.
Al-Rubaian’s optimism is hinged on the new regulations, which have liberalized the market and opened it to regional and international players.
The impact of the new regulations can be seen in the licensing of new companies, floating of shares in the stock market (Tadawul), implementation of new insurance laws and the increase in competition which will make a whole lot of a difference to the industry, making it not only stronger but also sophisticated.
In fact, Al-Rubaian said, Saudi Re will be “in a league of its own since it’s the first Saudi, and the only, reinsurer in the Kingdom whose clients will be insurance companies themselves.”
As of now, Tawuniya, formerly the National Company for Cooperative Insurance (NCCI), is leading 20 other insurance companies, which have been granted licenses by the Saudi Arabian Monetary Agency (SAMA). There are 24 more companies waiting in the wings for the green light to make a dash for the lucrative market.
Saudi Re has a SR11 billion capital divided into 100 million shares with a nominal value of SR10 per share. The company’s founders have already subscribed for 60 million shares representing 60 percent of the company’s total, which was paid in full. The balance of 40 percent shares will be offered for public subscription for SR400 million.
Aside from Saudi Re, two other insurance firms are planning to hold an IPO. These are BUPA Arabia and United Company Agency (UCA).
Nouhad Taleb, the designated CEO, also expressed optimism regarding the prospects of Saudi Re, saying that its key officials have worked for many years in the insurance industry. Taleb himself had worked for many years in a German insurance firm in Germany and other countries before joining Saudi Re.
He noted the Kingdom has a vibrant economy that’s conducive to the development of the local insurance industry. This enables Saudis and expatriates to have disposable incomes for insurance coverage, either life or non-life. In addition, there are also the six new economic cities coming up that will certainly help in the growth of the industry. As a result, foreign players have come and forged partnership with local firms to cash in.
