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PIF acquires 23% stake in Saudi Reinsurance Company

Saudi Reinsurance has its headquarters in Riyadh. The PIF says its investment will help the reinsurer's growth Unsplash/Youssef Abdelwahab
Saudi Reinsurance has its headquarters in Riyadh. The PIF says its investment will help the reinsurer's growth
  • Investment of $114m
  • Aims to improve growth potential 
  • Reinsurance insures insurance companies 

Saudi Arabia’s Public Investment Fund has acquired a 23 percent stake in Saudi Reinsurance Company (Saudi Re) through a capital increase and subscription to new shares. 

Reinsurance offers insurance companies insurance of their own, helping insurers manage their risks by absorbing some of their losses. 

The investment will improve the reinsurer’s growth potential in the Saudi market by adding to its financial capacity and strengthen its credit rating, PIF said. 

In October 2023, Saudi Re signed a non-binding memorandum of understanding with PIF for the sovereign wealth fund to subscribe to new cash shares in Saudi Re by way of capital increase. 

In July, Saudi Re announced plans to increase its capital from SAR891 million ($237 million) to SAR1.15 billion through a subscription with PIF. 

The announcement on the Saudi stock exchange, where Saudi Re’s shares are traded, said PIF would pay SAR16 per share, amounting to a total investment of SAR427 million. 

PIF said the investment would help Saudi insurance companies to manage risk. 

It is also expected to contribute to more reinsurance premiums staying within Saudi Arabia, while also growing the local sector. 

“By investing in Saudi Re, PIF is reinforcing a leading regional reinsurer and strengthening Saudi Arabia’s insurance sector, which is an essential component of sustainable economic growth,” said Sultan Alsheikh, head of financial institutions in Mena investments at PIF.