Saudi insurance companies will maintain losses
Wednesday, 06 10 2015, Category: Insurance and Reinsurance, Country: Saudi Arabia
The Saudi insurance sector lives a difficult situation which led a number of companies to raise their capital after it was diminished. Some companies suffered huge losses due to a weak demand compared to supply in addition to administrative weaknesses, which led some companies to be suspended from the stock exchange “Tadawul”. The insurance sector is considered to be the largest given the number of the companies listed in the Saudi stock exchange and its market capitalization reached SAR 55.5 billion. However, the insurance sector realized losses due to increased claims which went up by 11 percent and exceeded SAR 17.5 billion.
The economic analyst Mr. Mohamad Imran told “Al Hayat” that the number of companies existent in the Saudi insurance market is excessive and the amount of capital was also excessive. Therefore, companies had an excellent liquidity and investments which continued to achieve high returns until today. However, the listed companies which were established suffered from losses and lost parts of their capital which necessitated in turn to raise capital in order to cover losses.
Source: Al Hayat