PIF acquires 23.08% stake in Saudi Re

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has announced the acquisition of a 23.08% stake in Saudi Reinsurance Company (Saudi Re) through a capital increase and subscription to new shares.

This deal was first announced in October 2023, when Saudi Re signed a non-binding memorandum of understanding (MoU) with PIF. Under the agreement, PIF will subscribe to new shares in Saudi Re via a capital increase, while suspending the preemptive rights of existing shareholders.

In July 2024, Saudi Re confirmed a capital increase of approximately USD 71 million through a strategic subscription with PIF, according to a stock exchange filing.

PIF’s capital investment aims to enhance Saudi Re’s growth potential by strengthening its financial capacity and improving its credit rating. It will also support Saudi insurance firms by enabling Saudi Re to provide high-quality reinsurance, helping these firms manage risks more effectively.

The investment is expected to retain more reinsurance premiums within Saudi Arabia, foster the growth of the local reinsurance sector, and provide better coverage for commercial activities, ultimately enhancing the broader economy’s financial resilience.

A better-capitalised Saudi Re will be better positioned to meet growing demand, develop new products, and expand both domestically and internationally.

Sultan Alsheikh, Head of Financial Institutions in MENA Investments at PIF, said, “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. This enhances access to quality financial services for insurers and their policyholders, and strengthens the sector.”

Ahmed Al-Jabr, CEO of Saudi Re, commented, “We are delighted to welcome PIF as a strategic investor and look forward to its role in enabling Saudi Re’s strategy and reinforcing its position as a national reinsurer, while further strengthening its presence regionally and globally. This investment will provide us with multiple benefits, including boosting our financial position and unlocking opportunities for expansion and growth.”

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