Walaa Insurance capital hike aims to support growth, maintain solvency margin: CEO

Walaa Cooperative Insurance Co.’s chief executive officer, Johnson Varughese

Walaa Cooperative Insurance Co.’s capital hike aims to support growth plans in all activities and maintain good solvency in line with current levels, said company CEO Johnson Varughese.

In addition, the move aims to maintain the company’s rating.

The insurer achieved good returns during the past 10 years and needs sufficient capital to seize growth opportunities in the coming years, in addition to absorbing additional risks and achieving expansion, the CEO told CNBC Arabia TV.

Walaa has a small share in the health insurance sector and will focus on increasing it, he said, expecting to achieve great growth in the auto insurance product.

Real estate insurance is the most profitable part in the Kingdom, Varughese said, indicating that the company intends to increase its share in the Saudi market during the next three years.

Life insurance is a new category, with a small market in the Kingdom, and is expected that these products will grow, he said, adding that the company obtained the license and started receiving support from other insurance companies that subscribe to life insurance.

With regard to mergers in the sector, Walaa CEO said that only large companies with adequate capital will be able to grow profitably in the market.

Earlier this week, Walaa’s board of directors recommended increasing capital via a SAR 775 million rights issue, according to data compiled by Argaam.

In March 2020, Walaa merged with Metlife AIG ANB Cooperative Insurance Co. and its capital was increased from SAR 528 million to SAR 646.4 million.