The Cabinet yesterday licensed 13 new insurance companies in Saudi Arabia, a move is likely to significantly change the Kingdom’s insurance market, the Arab News reported today.
The Cabinet’s decision will put an end to the monopoly currently held by the National Company for Cooperative Insurance (NCCI). It is also expected to create thousands of jobs.
The 13 new companies are: Gulf Union Cooperative Insurance, Arabian Shield Insurance, Sanad for Cooperative Insurance, Saudi United Cooperative Insurance (Amity), Assurance Saudi Fransi, Al-Ahlia Insurance, Mediterranean & Gulf Insurance & Reinsurance (MedGulf), Malath Insurance, Saudi Indian Insurance, Saudi IAIC for Insurance, Allied Cooperative Insurance Group, SABB Takaful and Saudi Arabian Insurance.
“It’s a giant step forward,” economist and Consultative Council member Ihsan Buhulaiga told the Arab News. Buhulaiga also said that the move would boost the economy and attract billions of dollars in foreign investment to the Kingdom.
Most of the new businesses are joint ventures with foreign insurance companies. They are required to retain 30 percent of income in Saudi Arabia to cover payouts.
The 13 companies will have a total capital of $692 million [SR 2.62 billion] and they will float shares worth $250 million [SR 936.44 million] for public subscription.