Public Investment Fund Acquires 23% of Saudi Re to Boost Insurance Sector
The Public Investment Fund (PIF) of Saudi Arabia has secured a 23.08% stake in Saudi Reinsurance Co. This acquisition, achieved through a capital increase and subscription to new shares, elevates the company’s capital from SR891 million to SR1.15 billion. This strategic move aims to enhance Saudi Re’s financial stability and improve its credit ratings.
This investment, backed by regulatory and shareholder approvals, is set to solidify Saudi Re’s position as the national reinsurer. It aligns with Saudi Arabia’s Vision 2030, which focuses on strengthening the insurance sector. By retaining more premiums within the country, Saudi Re will help grow the local reinsurance market and improve risk management for domestic insurers.
Sultan Alsheikh, PIF’s head of financial institutions, emphasized the importance of this investment in fortifying Saudi Arabia’s insurance sector as a vital component of sustainable economic growth. He highlighted that this move enhances access to quality financial services for insurers and policyholders.
The capital increase will be funded by issuing 26.73 million new shares priced at SR10 each, fully subscribed by PIF at SR16 per share, amounting to SR427.68 million. Ahmed Al-Jabr, CEO of Saudi Re, expressed enthusiasm about PIF’s strategic investment, anticipating it will bolster the company’s financial standing and open new growth opportunities.
Saudi Re, listed on the Saudi Market Exchange, operates in over 40 countries, including regions in the Middle East, Asia, Africa, and the UK’s Lloyd’s market. It holds commendable credit ratings, such as an A-minus from S&P Global and an A3 from Moody’s. In the first nine months of 2024, it recorded written premiums totaling SR1.94 billion, with a 17% annual growth rate over five years.
This acquisition aligns with PIF’s Vision 2030 strategy to diversify the economy and foster partnerships that enhance local content. By expanding Saudi Re’s capacity to meet growing reinsurance demands, PIF is playing a crucial role in developing a robust insurance ecosystem in Saudi Arabia.