His Excellency the Governor of the Saudi Central Bank (SAMA), Dr. Ahmad bin Abdul Karim Al Kholify, honored newly merged insurance companies in Saudi, namely, Walaa Cooperative Insurance Co and MetLife on one hand, and Gulf Union Cooperative Insurance Company and Al-Ahlia Cooperative Insurance Co on the other hand. This came after the governor held his periodic meetings with the chairmen of the boards of director of the insurance companies, attended by Deputy Governor Ayman bin Mohammed Al-Sayari. The meeting discussed several important topics pertaining to the insurance sector, including the Central Bank's aspirations in promoting the insurance sector, as well as a number of related initiatives aligned with SAMA's supervisory and regulatory vision, to which several remarks and observations were discussed as well during the meeting.
The Saudi Central Bank emphasized the importance of the two mergers as a demonstration of SAMA's efforts to develop and regulate the insurance sector and raise its overall financial solvency by encouraging capital increase in the insurance sector. SAMA clarified that mergers and acquisitions are a valid way to realize the aforementioned goal and highlighted that the merger in question came at an important phase of the overall development period that the Kingdom is currently going through towards the achievement of the 2030 vision and strategic programs. As a core supporter of the Kingdom's economy and a main pillar of the financial sector development program, the insurance sector was once more encouraged to achieve mergers and acquisitions. This coincided with the Central Bank's launch of its financial sector development program, its revelation of its aspirations for the insurance sector, and its national strategy. The goal of the Central Bank through these initiatives is to achieve sustainable development, diversification, digitization, innovation, and capital deepening in the insurance sector, and to revitalize competition.
The Central Bank noted that one of the most important positive economic consequences that the sector may experience as a result of mergers and acquisitions is a notable increase in competitive capabilities as a result of the formation of large insurance entities. These large insurance entities are more capable of engaging in competition, development and innovation, and they may play a significant role in the improvement of the financial status of the insurance sector and allow it to better maintain the rights of the insured parties. This will also improve service quality, help in lowering expenses, and introduce a myriad of other positive economic effects on the economy, the financial sector, clients, and insurance beneficiaries.
