Demands for Increasing Capital of KSA Insurance Companies to 1 billion Rials or Consolidation
Saturday, 05 16 2015, Category: Insurance and Reinsurance, Country: Saudi Arabia
Economists and specialists in the insurance sector are calling for the consolidation of more than 24 companies suffering from accumulated losses and having a book value less than face value.
In their talk with “Al-Hayat”, they stated that setting paid up capital at 100 million Rials is unfeasible as most companies spend their capital on administrative issues and challenges they face at the beginning stages of running their business. Because of this, they suggest that paid up capital be set at 1 billion Rials.
Khaled Al Jawhar, a stock market specialist and managing director of Al Jawhar for Trading and Investment Company, said that the insurance sector is productive and profitable and is as important as the banking sector. Unfortunately, insurance companies have not been licensed and dealt with as major companies and this has caused many of them to suffer.