Saudi Re eyes $356m capital raise through IPO

Saudi Reinsurance Company (Saudi Re) announced that its board had recommended a capital increase through a rights issue of SR445.5 million ($118.7 million).

Saudi Re, which is listed on the Saudi Stock Exchange (Tadawul), said the decision to raise capital from SR891 million ($237.5 million) to SR1.37 billion ($356 million) aims to strengthen its capital base and support its future expansion activities. . As a result, the number of shares will increase from 89.1 million to 133.65 million.

However, Saudi Re pointed out that the capital increase was pending approval from the Central Bank of Saudi Arabia (SAMA), the Capital Market Authority (CMA) and other regulatory authorities, in addition to its extraordinary general meeting.

Last year, Saudi Re successfully raised its capital from SR810 million to SR891 million by capitalizing SR81 million from retained earnings. The capital increase was carried out through a 1 for 10 free share distribution, he added.

Commenting on the capital increase, Managing Director and CEO Fahad Al Hesni said, “We have achieved a growth rate of 19% over the past three years as we expand our business to more than 40 markets in the Middle East, Asia and the Lloyd’s market. in the UK and Africa.”

“Our gross written premium (GWP) increased by 19.3% to reach SR 1.1 billion in 2021, marking the highest premium level achieved in Saudi Re’s history and reinforcing our status among the world’s reinsurers. top-ranked Middle East,” he noted.

The Saudi group has developed its strategy for 2026, which focuses on consolidating the group’s presence in its domestic market, as well as diversifying into international markets.

“In line with our long-term strategy towards 2026, we have set ourselves with a clear ambition at the start of 2021 to evolve and diversify as a company capable of reliably responding to the risks and growing reinsurance needs of the Kingdom, aiming to become one of the top 50 global reinsurers,” said Al Hesni.

Despite challenging market conditions, Saudi Re maintained its track record of profitability in 2021 by recording net profit of SR38.3 million, driving total equity growth of 4.4% to SR964 million (257 million) by the end of 2021.

One of the largest reinsurers in the region, Saudi Re offers several risk transfer solutions and specializes in compulsory and voluntary reinsurance solutions in the engineering, property, marine, accident, vehicles, life and health.

It maintained its insurance financial strength rating (IFSR) at A3 with a stable outlook from Moody’s Investors Service, reflecting industry expectations for the company to maintain profitability, capital adequacy, an adequate level of reserves and strong asset quality demonstrated by its investment portfolio.

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