Saudi Reinsurance Company has announced plans to increase its capital through a new share issuance, following approval from the Capital Market Authority (CMA). The move is aimed at bolstering the company’s financial position and expanding its operations.
The CMA has authorized Saudi Reinsurance to issue over 26.7 million shares, valued at SAR 427.68 million (US$113.8 million). The capital increase will proceed without pre-emptive rights for existing shareholders.
In July, the company signed a binding subscription agreement with the Public Investment Fund (PIF) as part of the capital increase plan.
The agreement will raise Saudi Reinsurance’s capital from SAR 891 million to more than SAR 1.158 billion, with PIF subscribing to the newly issued shares, according to a report from Zawya.
Under the terms of the deal, the company will issue 26,730,000 shares to PIF. Following the transaction, PIF will hold a 23.08% stake in Saudi Reinsurance.
In other recent developments, Saudi Re reported its financial performance for the nine-month period ending September 30, showing significant growth across key metrics compared to the same period last year.
Insurance revenues for the third quarter reached SAR 341.5 million (US$91 million), marking a 64.7% increase from SAR 207.3 million (US$55 million) in the same quarter last year and a 23.8% rise from SAR 275.7 million (US$73.5 million) in the previous quarter.
The result of insurance services, however, showed a loss of SAR 42.2 million (US$11.3 million) for the current quarter, a sharp decline from a loss of SAR 3.1 million (US$830,000) in the third quarter of 2023.
Meanwhile, Saudi insurance companies are also projecting improvements in their financial performance following the implementation of a new mechanism requiring a portion of reinsurance premiums to remain within the local market.
The Saudi Insurance Authority introduced the measure, which seeks to strengthen the role of domestic reinsurance firms in managing insurance risks within Saudi Arabia.
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