#Saudi Regulator Seeks to Raise Capital Levels for Insurers - Bloomberg

Saudi Regulator Seeks to Raise Capital Levels for Insurers - Bloomberg:

Saudi Arabia is working on new regulations that would raise capital requirements for the kingdom’s overcrowded insurance sector, its central bank governor said in an interview with Bloomberg TV.

The new rules would “make the market more attractive to foreign investors,” Ahmed Alkholifey, governor of the Saudi Arabian Monetary Authority, said in an interview Sunday in Riyadh. Officials are trying to expedite the regulations and hope they’ll be passed this year, he said. The government also wants to encourage other lines of business beyond motor and health insurance.

The central bank, which regulates the financial-services industry, has been urging consolidation in the kingdom’s crowded insurance market for several years. Of Saudi Arabia’s 33 insurance companies, 10 made a loss last year, with the bulk of all the profits being earned by just two companies -- Bupa Arabia and The Company for Cooperative Insurance, known as Tawuniya.

“We have too many small companies,” Alkholifey said. “If we have bigger companies serving the market in a better way that would be good. What is going on in the insurance sector is not just the supply side but also the demand side and more awareness.”