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)
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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.



US Trade Delegation in Iraq to Boost Economic Ties

 Iraqis walk through the book market in the Mutanabi Street of Baghdad, Iraq, Friday, April 4, 2025. (AP)
Iraqis walk through the book market in the Mutanabi Street of Baghdad, Iraq, Friday, April 4, 2025. (AP)
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US Trade Delegation in Iraq to Boost Economic Ties

 Iraqis walk through the book market in the Mutanabi Street of Baghdad, Iraq, Friday, April 4, 2025. (AP)
Iraqis walk through the book market in the Mutanabi Street of Baghdad, Iraq, Friday, April 4, 2025. (AP)

A US trade delegation representing 60 companies was visiting Iraq to sign economic cooperation agreements with the private sector, Washington's embassy in Baghdad said Tuesday.

The three-day visit, which began on Monday, comes amid fears of an international recession after US President Donald Trump imposed sweeping tariffs on numerous countries, which included 39 percent duties on Iraqi imports.

The US delegation consists of 101 members from 60 companies in the energy, technology and health sectors, who are set to meet with senior Iraqi officials and sign agreements, said an embassy statement to AFP.

It is the largest US trade mission to Iraq in the more than 100-year history of the United States Chamber of Commerce, the embassy added.

In a post on X, the US mission said that a "pivotal memorandum of understanding to strengthen ties between the US and Iraqi private sectors" was signed on Monday between the US Chamber of Commerce and the Federation of Iraqi Chambers of Commerce.

"This partnership will foster long-term economic collaboration," it said.

According to the office of the US trade representative in Iraq, total goods trade with the oil-rich country reached $9.1 billion in 2024, with US exports amounting to $1.7 billion.

US goods imports from Iraq totaled $7.4 billion.

During the visit, Iraq is expected to sign a "landmark agreement" with General Electric to develop a high-efficiency power plant, according to Farhad Alaaldin, foreign policy adviser to the Iraqi Prime Minister Mohammed Shia al-Sudani.

Last year, during Sudani's visit to Washington, Iraq and the United States signed several memoranda of understanding in the energy sector, including one with General Electric to ensure the maintenance of the Iraqi electricity grid.

Iraq's power plants are currently highly dependent on gas imported from Iran, which provides about a third of its neighbor's energy needs.

But Tehran has often cut supplies, exacerbating regular power outages.

Baghdad has repeatedly stressed the need to diversify energy sources to reduce its dependence on Iran.

Iraq has been trying to move past decades of war and unrest, including a sectarian struggle after the US-led invasion 2003 toppled Saddam Hussein.