Malath, insurance firms ink contract to manage latent defects insurance product

Malath Cooperative Insurance Co. signed today an agreement with several participating insurance firms for latent defects insurance product.

The company said in a bourse statement that the agreement comes after Saudi Arabian Monetary Authority’s (SAMA) approved Malath as the leading firm to manage the latent defects insurance program on behalf of the insurance sector.

Malath will follow the principle of insurance participation, selling the product and providing insurance coverage by creating a joint insurance portfolio(s) between licensed insurance firms.

The company clarified that it will exclusively assume full management during the term of the joint insurance agreement, adding the contracting period with the participating insurance firms is 5 years.

The annual value of the contract is projected to exceed 5% of the company’s gross written premium (GWP) in 2020.

The agreement will have a positive impact on the company’s GWP, as well as financial results, and will be reflected gradually starting from Q3 2020.

There are no related parties, the statement noted.

In December 2019, Malath obtained SAMA’s approval to offer a construction guarantee insurance product.

The product covers hidden defects in buildings, which may appear after the completion of construction, such as the building structure, water insulation, plumbing, electricity, mechanical works, and interior finishes.