Mergers of Saudi insurance firms face delays due to internal decisions of their board of directors, Adel Al-Issa, spokesperson of insurance firms in the Kingdom, told CNBC Arabia.
"It is preferable for mergers to include more than two firms to create a stronger and larger entity, and also fast track the consolidation process," Al-Issa said.
“Mergers are a strategic imperative”, he noted, expecting the shutdown of companies that do not plan consolidations up to three years of establishment.
Companies are facing fierce competition, while compulsory insurance payments and investment losses are among the key market challenges.
Elsewhere, Al-Issa expected the electronic link between service providers and insurance firms to take place by the end of this year.
"The move will help reduce manipulations and offer fair pricing opportunities," Al-Issa concluded.
Last July, Solidarity Saudi Takaful Co. and Aljazira Takaful Taawuni Co. have signed a non-binding MOU to evaluate a potential merger between the companies, Argaam reported.
Read: Saudi insurers Solidarity, Aljazira Takaful consider merger
Walaa Insurance Cooperative Co. also inked in April a non-binding memorandum of understanding (MoU) with MetLife AIG ANB Cooperative Insurance Co. to evaluate a potential merger between both companies.
Read: Walaa, MetLife AIG ANB to evaluate potential merger
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