According to S&P Global Ratings, nearly 90% of Saudi insurers would be required to increase the share capital, merge with other operators or leave the market to comply with the Saudi Arabian Monetary Authority (SAMA)'s new capitalization requirements.
The minimum capital required to carry out direct insurance operations will increase to 500 million SAR (133.2 million USD) against 100 million SAR (26 million USD) currently.
Despite the increasing premiums (9.5%) and profits (13.4%) in the region during the first quarter of 2019, nearly one-third of the Islamic insurers in the Gulf countries (GCC) continue to report loss-making underwriting results.
These companies face eroded capital buffers, solvency problems and license suspensions, particularly in Saudi Arabia, the largest Islamic insurance market in the GCC countries. This situation has led to a deterioration of their ratings in recent years.
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