Gulf Union Cooperative Insurance Co. and Al Ahlia for Cooperative Insurance are working on the memorandum of understanding and terms for the potential merger, chief executive Munir Al-Borno, told Argaam on Wednesday.
Gulf Union is positive about the planned merger, he said, as it believes that Al Ahlia is an “appropriate partner”.
The insurance firms decided in March to begin initial talks with for a potential merger.
Al-Borno also said the company has taken several steps—which includes capital cut, improved pricing, cost management and increase in the points of sale-- to strengthen its balance sheet, and offset accumulated losses.
The insurer offset its SAR 73.6 million accumulated losses, which accounted for 33.5 percent of capital, by reducing its capital to SAR 150 million from SAR 220 million.
These losses were accumulated long ago, and Gulf Union has reaped the fruit of its strategic plan, which has been adopted for three years, Al-Borno said.
With regard to its suspension by the Council of Cooperative Health Insurance (CCHI), Gulf Union has not been yet informed of violations of issuing health insurance policies, Al-Borno added.
The company is keen to fix irregularities to resume issuance of medical insurance policies, he added.
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