The Public Investment Fund (PIF) announced yesterday that it has acquired a 23.08% stake in Saudi Reinsurance Company (Saudi Re) by way of a capital increase and subscription to new shares, with the suspension of preemptive rights in accordance with Capital Market Authority regulations, the Fund said in a statement.
PIF’s capital investment aims to enhance Saudi Re’s growth potential by adding to its financial capacity and further strengthen its credit rating. PIF’s capital investment also supports local insurers by enabling Saudi Re to deliver high quality reinsurance, permitting Saudi insurance companies to manage risk more effectively. Insurers use reinsurance to provide adequate coverage to their policyholders and reduce earnings volatility. Saudi Re enables Saudi insurance firms to grow and innovate.
The statement added that the investment is expected to contribute to retaining more reinsurance premiums within Saudi Arabia while also growing the local reinsurance sector, and allowing better coverage for commercial activities for both insurance firms and companies in general, making the economy as a whole more financially resilient. “A better capitalised Saudi Re will be more able to meet rapid growth in demand, and devise new products, while having increased capacity to expand in domestic and global markets,” said the PIF statement.
PIF head of financial institutions in MENA investments Sultan Alsheikh said, “By investing in Saudi Re, PIF is reinforcing a leading regional reinsurer and strengthening Saudi Arabia’s insurance sector, which is an essential component of sustainable economic growth. This enhances access to quality financial services for insurers and their policyholders, and strengthens the sector.”
Saudi Re CEO Ahmed Al-Jabr said, “We are delighted to welcome PIF as a strategic investor and look forward to its role in enabling Saudi Re’s strategy and reinforcing its position as a national reinsurer, while further strengthening its presence regionally and globally. This investment will provide us with multiple benefits, including boosting our financial position and unlocking opportunities for expansion and growth.”
Saudi Re is a leading MENA reinsurance company and holds an A-minus rating from S&P Global and an A3 rating from Moody's. In the first nine months of 2024, Saudi Re's GWP reached SAR1.94bn ($520m). It achieved a compound annual growth rate of 17% over the five years up to the end of the 2023 financial year.
The transaction secured regulatory consents and was approved by Saudi Re’s shareholders at an extraordinary general meeting.