Saudi Reinsurance Company (Saudi Re) has announced that its board has recommended an increase in capital through a SR445.5 million ($118.7 million) rights issue. 

 

Saudi Re, which is listed on the Saudi Exchange (Tadawul), said the move to boost the capital from SR891 million ($237.5 million) to SR1.37 billion ($356 million) is aimed at strengthening its capital base and support its future expansion activities. Accordingly, the number of shares will increase from 89.1 million to 133.65 million.

 

However, Saudi Re pointed out the capital hike is pending approval of the Saudi Central Bank (SAMA), the Capital Market Authority (CMA), and other regulatory authorities, in addition to its extraordinary general meeting.

 

Last year, Saudi Re had successfully boosted its capital to SR891 million from SR810 million by capitalizing SR81 million from retained earnings. The capital increase was done through a 1-for-10 bonus share distribution, it added.

 

On the capital hike move, Managing Director and CEO Fahad Al Hesni said: "We have attained a growth rate of 19% over the past three years, as we expand our activities across more than 40 markets in the Middle East, Asia and Lloyd’s Market in the United Kingdom and Africa."

 

"Our Gross Written Premium (GWP) increased scale by 19.3% to SR1.1 billion in 2021, marking the highest premium level achieved in the history of Saudi Re and reinforcing our status among the top-ranked Middle Eastern reinsurers," he noted.

 

The Saudi group has developed its strategy towards 2026, which focuses on solidifying the group's presence in its home market, as well as diversifying in international markets.

 

"In line with our long-term strategy towards 2026, we have set out with a clear ambition at the onset of 2021 to evolve and diversify as a company that can reliably serve the risk and growing reinsurance needs of the Kingdom, aiming to become among the top 50 global reinsurers," stated Al Hesni.

 

Despite challenging market conditions, Saudi Re maintained its track record of profitability in 2021 by registering a net profit of SR38.3 million, resulting in a 4.4% growth in total shareholders’ equity to SR964 million ($257 million) by the end of 2021.

 

One of the biggest reinsurers in the region, Saudi Re provides several solutions in the transfer of risks and specializes in compulsory and optional reinsurance solutions in engineering, property, marine, accidents, vehicles, life, and health sectors.

 

It has maintained its Insurance Financial Strength Rating (IFSR) at A3 with a stable outlook from Moody’s Investors Service, thus reflecting industry expectations for the company to maintain profitability, capital adequacy, adequate level of reserves and strong asset quality demonstrated by its investment portfolio.-TradeArabia News Service