Saudi insurers face solvability problems

Magazine Issue:

Magazine date:

Jun 2019

Multiple Saudi insurance companies are having hard times with their Shareholders’ equity. At 31 December 2018, 12 over 31 companies operating in the market recorded shareholders' equity lower than their capital.

Arabie Saoudite Such an abnormal and risky situation can be traced back to accumulated losses over the years, pushing the insurers to draw from their Shareholders' Equity. Although having been authorized to reduce their capital to improve the results, the insurers’ situation remains critical.

In order to consolidate the market, the authorities plan to increase the minimum capital of insurers, from 100 million SAR (26.6 million USD) to 500 million SAR (133.2 million USD). If such a strategy were to be applied, only Bupa Arabia and Tawuniya would be in accordance with the new threshold. To continue to operate, the other companies would have to review the situation with their shareholders.

Saudi insurers’ capital and equity positions in 2018

Saudi insurers whose shareholder's equity to capital ratio is equal to or above 100%

	Insurer	Capital		Shareholders' equity		Shareholder's equity to capital ratio
	Insurer	IN SAR	In USD	In SAR	In USD	Shareholder's equity to capital ratio
1	Bupa Arabia	1200	319	2574	685	215
2	Al-Rajhi	400	106	768	204	192
3	Buruj	250	67	454	121	181
4	Trade Union	275	73	432	115	157
5	Walaa	440	117	671	179	152
6	Tawuniya	1250	333	1899	506	152
7	Chubb	200	53	293	78	147
8	Arabian Shield	300	80	428	114	143
9	Al Ahli	167	44	235	63	141
10	AXA	200	53	268	71	134
11	Allianz	450	120	590	157	131
12	Watanya	200	53	240	64	120
13	Jazira	350	93	398	106	114
14	Gulf Union	150	40	167	44	112
15	SAQR	400	106	442	118	110
16	SAICO	300	80	321	85	107
17	Salama	250	67	264	70	106
18	SABB	340	91	346	92	102
19	Solidarity	250	67	251	67	100

Saudi insurers whose shareholder's equity to capital ratio is below 100%

	Insurer	Capital		Shareholders' equity		Shareholder's equity to capital ratio
	Insurer	IN SAR	In USD	In SAR	In USD	Shareholder's equity to capital ratio
1	Alamiya	400	106	387	103	97
2	Arabia	265	71	251	67	95
3	UCA	400	106	361	96	90
4	Malath	500	133	450	120	90
5	MetLife	180	48	154	41	85
6	MedGulf	800	213	672	179	84
7	Tokio Marine	300	80	246	65	82
8	Gulf General	200	53	159	42	80
9	Al Ahlia	160	43	123	33	77
10	ACIG	200	53	138	37	69
11	Amana	140	37	96	26	68
12	Enaya	100	27	56	15	56

Read also | Top 30 insurance companies in Saudi Arabia [4]