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Abu Dhabi insurer Adnic takes over Saudi’s Allianz SF

Adnic Allianz SF Adnic
Abu Dhabi state-owned Adnic will take a 51 percent stake in Saudi's Allianz SF, in a $133 million deal
  • $133m deal gives Adnic 51%
  • Allianz SF revenue was $225m last year
  • Adnic Q1 net profit was $55.6m

Abu Dhabi National Insurance Company (Adnic) is to take a majority stake in one of Saudi Arabia’s top insurance companies as it looks to increase its presence in the kingdom.

Adnic announced to the Abu Dhabi Securities Exchange (ADX) on Thursday that it plans to acquire 51 percent of share capital of Allianz Saudi Fransi Cooperative Insurance Company (Allianz SF) in a deal worth $133 million.

The filing said the acquisition will be funded through internal cash resources and is expected to be complete “in the coming quarters”.

As well as expanding into Saudi Arabia, Adnic said the Allianz SF deal will also “boost its consumer retail portfolios as a substantial percentage of the target company’s customer base comes from this segment”.

The Saudi insurer is a joint stock company listed on the Saudi Exchange (Tadawul), and ranked 12th among Saudi Arabian insurance companies, according to Atlas Magazine. The annual turnover at the insurer reached $225 million in 2022, up 11 percent on the previous year.

Saudi Arabia set up a new independent insurance authority last month, which is expected to be fully operational by early next year.

Adel Al-Eisa, who acts as spokesman for Saudi insurers, told Asharq TV it would focus on facilitating merger activity among the industry’s 200 companies. This is in keeping with the aim of increasing their contribution to non-oil GDP to over 4 percent by 2030.

The kingdom’s central bank said in an annual report in May that the insurance sector grew by 26.9 percent in 2022. Gross written premiums amounted to SAR53 billion ($14 billion), up from SAR42 billion, with health and motor insurance driving the increase. 

The report said Saudi Arabia’s insurance penetration ratio – which usually registers the percentage of total premiums collected against GDP – had risen to 2 percent of non-oil GDP in 2022 from 1.9 percent in 2021.

The UAE’s healthcare insurance market is projected to grow from $10 billion in 2022 to $19 billion by 2030, according to Insights10, a healthcare-focused market research firm. 

Adnic reported a net profit of AED204.4 million ($55.6 million) in its financial results for the first half of this year.