The Board of Directors of Chubb Arabia Cooperative Insurance Company, listed on the Saudi Stock Exchange (Tadawul), announced its initial approval of the offer submitted by Chubb Investment International Limited, which aims to establish a new company specializing in reinsurance activity within the Kingdom of Saudi Arabia.
The company explained in its official statement published on the Saudi Stock Exchange website that this strategic project will be carried out in partnership with Al-Khuraiji Investment Company (as related parties), as it was initially agreed that Chubb Arabia Company’s share of ownership would be 10% of the capital of the company to be established.
Nature of the agreement and regulatory approvals
Chubb Arabia confirmed that this approval issued by the Board of Directors is currently a preliminary approval and is not binding on the parties, as the completion of this deal and the establishment of the new entity remains subject to fulfilling all legal requirements and obtaining the necessary regulatory and organizational approvals from the competent authorities in the Kingdom, most notably the Insurance Authority, the Saudi Central Bank and related entities.
The importance of the reinsurance sector in the Saudi economy
This step comes at a vital time as the insurance sector in the Kingdom of Saudi Arabia is witnessing radical transformations and rapid growth in line with the objectives of the Kingdom’s Vision 2030. The establishment of local reinsurance companies is a fundamental pillar for strengthening the financial infrastructure, as this trend aims to raise the percentage of insurance premiums retained within the national economy instead of reinsuring them entirely with foreign companies abroad.
The presence of strong reinsurance entities within the Kingdom contributes to enhancing the financial solvency of the sector, reducing risks, and attracting foreign direct investment, which is embodied in the entry of Chubb Investment International as a major partner in this project, reflecting the foreign investor’s confidence in the strength of the Saudi economy and the regulatory environment of the financial sector.
Strengthening the Financial Sector Development Program
This move falls within the broader context of the Financial Sector Development Program, one of the Vision 2030 programs, which aims to diversify financial instruments and support insurance companies in playing a greater role in non-oil GDP. The partnership between a locally listed entity (Chubb Arabia), an experienced international partner (Chubb International), and a local investor (Al-Khuraiji) exemplifies integration aimed at transferring knowledge and localizing global reinsurance expertise.
The company concluded its statement by emphasizing its commitment to full transparency, noting that it will disclose any material developments related to this matter as soon as they occur, in accordance with the regulations and rules issued by the Capital Market Authority.
