Saudi Central Bank says M&As in insurance sector to boost competition

Logo of the Saudi Central Bank (SAMA)

The Saudi Central Bank (SAMA) reiterated the need for insurance companies to look at merger and acquisition (M&A) deals, given the sector is a key driver of the Kingdom's economy and a pillar of the Financial Sector Development Program.

In a statement, SAMA said that the merger of Walaa Cooperative Insurance Co. and Metlife AIG ANB Cooperative Insurance Co., as well as Gulf Union National Cooperative Insurance Co. and Al-Ahlia Insurance Co., reflected its efforts to organize and develop the sector and boost its financial solvency by improving the insurers' capital.

The positive economic effects of M&As includes enhancing the insurance sector's competitive capabilities by creating large entities capable of withstanding competition, growth and innovation, and strengthening the sector's financial position to preserve the insured's rights.

Through the M&As, SAMA aims to improve customers' services, reduce costs, and improve efficiency, reflecting positively on the local economy, the financial sector, customers, and beneficiaries of the insurance coverage.