Saudi Arabia sees more than $ 200 billion in savings thanks to energy reform plan
ACE Insurance and Reinsurance Brokers currently generates around 60% of its business in Saudi Arabia, but hopes that new partnerships with Gallagher Global Brokerage, one of the world’s largest insurance brokerage and risk management firms, will help strengthen its presence in Kingdom and wider region.
Under the agreement, MIG Holding, ACE’s parent company, will take a 70% stake in the new entity, while the remaining 30% will be kept by Gallagher.
ACE has deep roots in the Kingdom, dating back to 1952 when the company was founded in Alkhobar.
“For more than 68 years, we have been a key driver in the evolution of the insurance industry in the Kingdom and in the MENA region,” Nagib Bahous, Chairman and CEO of MIG Holding, told Arab News.
“Currently, Saudi Arabia accounts for around 60% of total activity and offers great potential for growth. With the Saudi vision of 2030 growing, it is imperative to maintain and develop a strong Saudi presence. We are confident that the joint expertise of ACE and Gallagher will support the ACE operation and make a difference in a competitive market, ”he added.
The Kingdom’s insurance sector ended fiscal 2020 on a positive note, with overall net profit of local insurance companies increasing 47% year-on-year in the fourth quarter.
Thirteen insurers reported higher profits in 2020, with the top performer recording a 1081% increase in revenue, despite the pandemic.
“It will be another difficult year as the end of the pandemic and the return to normal life are not expected until the end of the year. Nonetheless, we are optimistic about the outlook, especially in Saudi Arabia, ”Bahous said.
“The Kingdom has a number of well-established sectors and is expanding into areas such as international real estate, financial services, marine, aviation and tourism. We expect to continue to see growth in these areas as life returns to the new normal, ”he added.
S&P Global Ratings, in its latest report on the GCC insurance sector, said it expects growth in Saudi Arabia due to regulatory initiatives. In the GCC, he expects his insurer ratings to remain broadly stable in 2021 due to strong capital buffers, despite the economic uncertainty associated with the pandemic.
“The industry, like so many others, is changing rapidly and looking to the future. When markets fully recover from the impact of the pandemic, we expect double-digit growth to return in all markets. In several GCC markets, the introduction of compulsory health insurances similar to those in Saudi Arabia and the United Arab Emirates will also increase insurance premiums, ”Bahous said.
The saudization rate in the insurance sector has reached 75% compared to 35-40% in the past and this is something that will be a priority for the new partnership.
“In 2021, ACE will continue to invest in people and attract the right talent to expand its operations and add value to clients. This is the key to ACE’s vision for sustainable growth, ”said Mr. Bahous.
Founded by Arthur J. Gallagher in Chicago in 1927, Gallagher employs more than 30,000 people in 56 countries.
“The Kingdom is an increasingly important strategic hub for insurance and strengthening Gallagher’s presence directly in the region is the next logical step in our growth,” Tom Gallagher, CEO of Gallagher Global Brokerage, told Arab News.