Saudi Re M&As key for international growth: CEO

Merger and acquisitions are key for Saudi Reinsurance Co. (Saudi Re) international growth strategy, according to its managing director and chief executive officer (CEO), Fahad Al-Hesni.

Probitas Holdings (Bermuda), which is 49.9-percent owned by Saudi Re, posted ‘excellent’ results, contributing to our profitability, Al-Hesni told Alarabiya TV. 

“The firm has the right to acquire the remaining stake in Probitas within the period between 2021 and 2023,” he said. 

Al-Hesni also noted that Saudi Re has made a comprehensive review of its local and Middle Eastern insurance portfolios. 

“We didn’t renew the portfolios that delivered negative results, and in some cases, the company changed terms to achieve better results,” he said.

“The firm reduced its automotive and healthcare portfolios in Saudi Arabia, given the challenges these sectors face,” Al-Hesni continued.

The company is currently focusing on non-proportional reinsurance contracts -- which lead to a decrease in its insurance premiums -- as they’re more profitable, despite their affordable premiums. 

“Our market share in the Saudi reinsurance sector stands at 6 percent,” Al-Hesni said.

According to Argaam’s compiled data, Saudi Re posted a net profit before zakat of SAR 42.6 million in the first half of 2019, compared to SAR 14 million a year earlier.