CHUBB Arabia ready for merger in principle, IFRS 17 to reflect on insurers in 2023: Managing Director

CHUBB Arabia Managing Director Abdulaziz Al Khereiji

CHUBB Arabia Cooperative Insurance Co. is ready for a merger in principle, eyeing merging with an appropriate partner that will provide a qualitative addition to both parties and achieve the best interest of shareholders, Managing Director Abdulaziz Al Khereiji told Argaam.

Mergers do not only take place in the Saudi market, but also with big global peers, Al Khereiji said, adding that this is the current era of major competitive entities.

The Tadawul-listed insurer conducts quarterly studies on the market and its movement, and there are always companies under the microscope.

CHUBB Arabia specializes in property and casualty insurance products, with more than 50 insurance products licensed by the Saudi Central Bank (SAMA), including travel and cyber risk insurance.

The insurer's market share in the property insurance sector, which contributes about 74% to its revenues, is estimated at 3%, the top official said, pointing out that CHUBB Arabia does not provide medical insurance products.

CHUBB Arabia has more than 2,000 insured facilities, Al Khereiji said, noting that the volume of corporate contracts declined slightly to SAR 144 million in 2022, compared to SAR 149 million a year earlier.

“We hope the efforts made by the insurer’s team contribute to increasing these numbers by the end of 2022,” he noted.

The insurance service provider formed a committee specialized in implementing the international accounting standard IFRS17, but faced some challenges at first due to COVID-19 pandemic and its inability to attract experts.

However, IFRS17 is expected to reflect on all insurance companies in 2023, as they will employ the old and new standards when issuing their upcoming balance sheets.

The current high-interest rates, according to Al Khereiji, will not have a negative impact on the insurance sector, thanks to the strength and durability of the Saudi economy. He pointed to a strong boom in projects carried out in the Kingdom, hoping that interest rates will not hinder some private sector projects.

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