Traders on the Saudi Stock Exchange, (Tadawul), are about to see ACE on their computer screens. Beginning April 18, ACE Arabia Cooperative Insurance Company, an ACE associate company formed to do business in Saudi Arabia, will be making an initial public offering of its stock to Saudi citizens. As a result of the IPO, ACE Arabia will be granted a license to operate within the Kingdom.
Until recently, Saudi Arabia had no legal regulations to allow the formation and operation of insurance companies, so ACE Arabia and other companies operated as offshore entities based in Bahrain and marketed insurance by arrangement with agents in Saudi Arabia.
Initially, ACE will own 30% of the new company. In addition to the publicly-owned shares, the family of Sheikh Abdul Karim El Khereiji will retain an interest in the company and he will remain as the company chairman.
ACE Arabia’s presence in the Kingdom goes back more than 30 years. Giles Ward, ACE Regional Managing Director for ACE Middle East and North Africa explains, “Prior to ACE’s involvement, a joint venture existed between Sheikh Abdul Karim El Khereiji and CIGNA Property & Casualty. Sheikh Abdul Karim therefore has been a very long-standing and loyal partner.”
ACE recognizes Saudi Arabia as a burgeoning market. Ward describes Saudi Arabia as, “one of the largest insurance markets in the Gulf region and one with considerable potential. Saudi Arabia has the largest population of all the Gulf Cooperation Council (GCC) countries and has emerged as one of the most resilient economies in the current downturn.”
The Kingdom is presently engaged in a programme of economic diversification and an infrastructure building boom, adding more promise for ACE Arabia. As Ward explains, “The completion of the IPO is the next stage in the history of success for ACE Arabia and it marks ACE’s continuing commitment to a market which we believe has much potential, especially in our key areas of product strength.