Saudi central bank has authorised some 30 new insurance firms to be set up.
Japan's Tokio Marine Holding has teamed up with Saudi Arabia's Alinma bank and Saudi Basic Industries Corp to set up an insurance firm in the kingdom's crowded but under tapped market.
Alinma Bank said it and Tokio Marine would equally share 57.5 percent of the new cooperative insurance firm's $53.3 million capital under a memorandum of understanding signed on Wednesday.
The new insurance firm will raise 30 percent of the capital from an initial public offering and the remaining 12.5 percent would be held by other partners including Saudi Basic Industries Corp, Alinma said in a statement. It did not elaborate.
The Saudi central bank has authorised some 30 new insurance firms to be set up over the last three years to unlock the sector's growth potential and increase competitiveness.
Almost all of these new firms have already sold shares to the public which raises pressure on them to deliver profits although many of them had to wait for months after their listing before obtaining full authorization to start commercial activity.
Saudi Arabia is one of the least insured areas in the world partly due to a belief among some Muslims that buying an insurance policy could indicate a lack of religious faith. (Reuters)