Saudi Reinsurance Company (Saudi Re), the kingdom's sole home-grown reinsurer is making big strides within its local market and abroad as international business accounts for half of its premium income; its strategic partnership with the PIF would give further momentum to its business, said Saudi Re CEO Ahmed Al-Jabr.
Saudi Arabia’s Public Investment Fund (PIF) has recently completed the acquisition of a 23.08% stake in Saudi Re, by subscribing to new shares issued by the company to increase the capital with the suspension of the right of priority. Mr Al-Jabr said that entering the fund as a strategic partner is of great importance to the company, its shareholders, customers and the sector as a whole.
He noted in an interview with Al Arabiya Business that this investment aims to enable the company to develop its technical and operational capabilities to keep pace with the growing demand in the Kingdom and strengthen the sector, and also contributes to consolidating the company's leadership at the local level and strengthening its presence regionally and internationally. He pointed out that the capital increase process was completed by 33%, bringing the capital after the offering to SAR1.158bn ($308.8), while the ownership of the investment fund after the increase is 23.08%.
Mr Al-Jabr said, "We are witnessing a great development in the insurance industry in the Kingdom. For the industry to succeed, it needs reinsurance services that contribute to underwriting prices and product development, so the fund's investment will enable the company to achieve this." He said that the insurance sector in the Kingdom is one of the fastest growing sectors over the past five years, and with large investments and development initiatives, the sector needs strong reinsurers.
Mr Al-Jabr said that Saudi Re's move to raise capital stems from the presence of great opportunities that the company is working on. He added that the company's strategy for 2028 focuses on two axes: the first is to consolidate the company's position in the main market in the Kingdom and take advantage of growth opportunities and the legislative environment that supports the development of the sector. Secondly, the company aims to enhance its competitiveness in international markets to maintain balance and diversification, which ensures sustainable profitability.
He said that Saudi Re has doubled its business volume over the past three years, demonstrating its ability to grow and have promising opportunities. “The capital increase will add momentum to the company and reflect positively on its performance and shareholders,” he said.
Regarding the announcement of the implementation of a mechanism to assign reinsurance premiums to the local market by at least 30%, Mr Al-Jabr said, "We appreciate the efforts of the Insurance Authority in this initiative, and I believe that it will contribute to increasing the retention rate of reinsurance premiums to reduce leakage abroad, support local content, and build a strong local reinsurance industry capable of providing protection for insurance systems."
He pointed out that the company's share increased to 11% thanks to the implementation of the attribution mechanism and the company's efforts.
He noted that the company's business is spread in more than 40 countries in the Middle East, Asia, Africa and Lloyd's market in the UK, and has had a presence in Malaysia for more than ten years, noting that the international business currently constitutes about 50% of the company's gross income, which enhances its geographical spread and diversity of risks.