Saudi Insurance Market Braces for Acquisition, Mergers

Healthcare companies in the Saudi market achieved record revenues (SPA)
Healthcare companies in the Saudi market achieved record revenues (SPA)
TT
20

Saudi Insurance Market Braces for Acquisition, Mergers

Healthcare companies in the Saudi market achieved record revenues (SPA)
Healthcare companies in the Saudi market achieved record revenues (SPA)

Saudi Arabia announced the establishment of the Insurance Authority (IA), reflecting a significant step forward in building a strong, vital, and stable insurance sector in the Kingdom.

Health projects in the Kingdom are improving, as the sector expects 100 new projects in health services in partnership between the government and the private sector over the next five years, with an estimated capital investment opportunity at $13 billion.

Saudi Shura Council member Fadel al-Buainain believes the Insurance Authority would contribute to pushing and stimulating mergers and acquisitions between insurance companies.

Buainain said that the Authority is expected to enhance mergers and acquisitions in the sector to create strong entities capable of growing, meeting needs, and effectively contributing to the economy.

He explained that some companies in the sector suffer from weak solvency and accumulated losses, among other issues.

The private health sector witnessed significant growth and development because of the insurance sector, said Buainain, adding that the Authority is expected to contribute to the development of health insurance and boost insurance companies.

He explained that this would help the companies meet the needs of the health sector in the future with the privatization of the health sector, increasing the demand for insurance.

Meanwhile, a member of the Board of Directors of the Saudi Economic Association (SEA), Saad al-Thaqfan, confirmed that mergers and acquisitions in the insurance sector during the coming period would increase their shares.

He noted that two companies control approximately 50 percent of the market, while all companies share the other 50 percent.

Thaqfan pointed out that the Authority will positively impact the insurance sector by focusing on structuring, developing, and supervising it.

He asserted that these sectors would continue to grow, particularly with individuals entering the labor market.

During the past decade, the insurance sector could not establish insurance companies with high creditworthiness, except for a few major companies.

During January 2021, several companies were under mergers and acquisitions, such as Walaa Cooperative Insurance, MetLife, Gulf Union Insurance, and al-Ahlia Insurance.

In 2022, the insurance sector grew 27 percent, while the insurance sector index recorded a growth of 55 percent since the beginning of the current year 2023.

The insurance sector is worth over $14 billion, with a 2.09 percent share of gross domestic product.

- The health sector

Healthcare companies in the Saudi market achieved record revenues exceeding $4.5 billion during the past year, with a growth rate of 14.2 percent. Net profits amounted to more than $800,000,000 million, with a growth rate of 22.8 percent over the previous year.

The net profit margin of companies increased during the past year to 17.5 percent, compared to about 16.3 percent for the previous year.

The health and social development sector expenditures from the general budget during the first half of this year amounted to $34 billion, constituting about 21.2 percent of the budget expenditures for 2023 and 28.5 percent more than the corresponding period last year.



China to US: 'Market Has Spoken' after Tariffs Spur Selloff

US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
TT
20

China to US: 'Market Has Spoken' after Tariffs Spur Selloff

US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

China said on Saturday "the market has spoken" in rejecting US President Donald Trump's tariffs, and called on Washington for "equal-footed consultation" after global markets plunged in reaction to the trade levies that drew Chinese retaliation.

Several Chinese commerce associations in industries from healthcare and textiles to electronics also issued statements on Saturday calling for unity in exploring alternative markets and saying the tariffs would worsen inflation in the United States.

Hong Kong Financial Secretary Paul Chan told public broadcaster RTHK, however, Hong Kong would not impose separate countermeasures, citing the need for the city to remain "free and open".

"The market has spoken," Chinese foreign ministry spokesperson Guo Jiakun said in a post on Facebook on Saturday. He also posted a picture capturing Friday's falls on US markets, Reuters reported.

Trump introduced additional 34% tariffs on Chinese goods as part of steep levies imposed on most US trade partners, bringing the total duties on China this year to 54%.

Trump also closed a trade loophole that had allowed low-value packages from China to enter the US duty-free.

This prompted retaliation from China on Friday, including extra levies of 34% on all US goods and export curbs on some rare earths, escalating the trade war between the world's two largest economies.

Global stock markets plummeted following China's retaliation and Trump's comments on Friday that he would not change course, extending sharp losses that followed Trump's initial tariff announcement earlier in the week and marking the biggest losses since the pandemic. For the week, the S&P 500 was down 9%.

"Now is the time for the US to stop doing the wrong things and resolve the differences with trading partners through equal-footed consultation," Guo wrote in English.

China's chamber of commerce, representing traders in food products, called on "China's food and agricultural products import and export industry to unite and strengthen cooperation to jointly explore domestic and foreign markets".

Hong Kong's Chan said it strongly opposes Trump's actions and would persist in being "free and open".

"Allowing a free flow of capital and acting as a free port are our advantages, and this will not change," Chan told public broadcaster RTHK.

"The rules-based multilateral trading system is our core," he said.