• Annual Report 2021

العربية | ENGLISH


Strategic Direction

Saudi Re has weaved a deeply thought out Strategy Towards 2026 with a clear vision to “Evolve Saudi Re into a diverse and strong top 50 global reinsurer, contributing to the growth of the Kingdom’s economy”. The Company has set out a clear ambition to evolve into a large well-diversified reinsurance company that can reliably serve the risk and growing reinsurance needs of the Kingdom, and contribute to its economic growth.

The strategy takes into consideration:

– Evolution of the local (re)insurance landscape and strategic course set by the Saudi Arabian regulator.

– International reinsurance market landscape and global consolidation trend in the quest for scale benefits.

– National agenda and key strategic objectives related to the (re)insurance sector.

– The need to build shareholder value.

Consequently, Saudi Re will be able to support the Kingdom’s national agenda by:

– Providing strong and reliable protection of national assets against a broad range of risks

– Fueling economic growth and access to long-term capital by retaining reinsurance premiums in the local market and avoiding outward foreign exchange flows

– Generating local employment opportunities for highly qualified professionals

– Providing proximity and local market knowledge to cedants

The above-mentioned strategy, accompanied by the corresponding capability build-up and balancing of global expansion, sets Saudi Re on a path that ensures growth, profitability, and diversified risk exposure.

The strategic plan was developed taking into consideration the various market trends, including economic, geopolitical, social, technical and technological aspects. The strategy continues to evolve around the following five pillars:


Scale, which relates to increasing the economic scale, earnings and capital base, and building resilience to loss events.


We aim at diversification, both geographically and also in terms of risk type, in which we endeavor to maintain a well balanced portfolio.

Technical and operational capabilities

We continually seek to develop our capabilities. These encompass technical capabilities, risk management capabilities, technological and operational capabilities, and human capital.


We value strong relationships, especially with cedants, brokers, partners, and regulators. Our corporate brand is also a strong factor in our relationship building.

Financial soundness

Financial soundness is also a key facet in the robustness of our business. We need to retain our technical profitability, capital adequacy and ensure favorable returns on investment.

Building economy of scale is significant to reduce volatility and allows the portfolio to absorb large losses. Scale benefits leads to more investments into developing capabilities and fuel operational expenses. It also supports investments performance by earning investment income from premium floats.

Looking ahead, we intend to leverage our competitive advantage in the Saudi market, through continued market retention and capitalizing on the growth of the Saudi economy. We also intend to achieve sustainable long-term growth in inherent defects insurance and other classes. We foresee continued opportunities in high-growth markets in the Middle East and Asia, as well as benefits from our Brand and cooperative model. Continued expansion of business through the Lloyds market is also on the cards. A major step in increasing our international footprint was the acquisition of a 49.9% stake in Probitas Holding, Bermuda in 2017, enhancing our position as an international player.

Diversification is central to our strategy, which seeks to minimize correlated risks, concentration risks, and accumulation risks. This ensures a well-balanced reinsurance portfolio and reduced volatility. Saudi Re is also seeking to reduce risks by spreading our business across many business lines and also by striking a balance between proportional and non-proportional contracts. We also strive for geographic diversification, with our portfolio at present being spread across over 40 markets in the Middle East, Asia and Africa. The international business today accounts for 57% of our portfolio.

In the interests of continued expansion of our business, we keep a balance between direct and broker channels. Through client diversification, we reduce our long-term dependence on major clients. Diversification also helps support our rating position.

We continually strive to build strong capabilities which span the entire gamut of operations of the reinsurance industry. Our underwriting team has strong professional skills, backed by prudent policies, with an understanding of the regional risk profile. Our risk appetites are also well defined. Saudi Re’s actuarial and analytical teams build on the risk assessments done by the underwriters, to work out premiums judiciously. Our claims management, supported by technical accounting, is also streamlined. Saudi Re also makes efficient use of retrocession, to mitigate the impacts of volatility. Growth and decision-making are facilitated by advanced capital modelling capabilities.

Our operational capabilities include technological, decision-making and human resources skills. Our client servicing is well supported by technological, analytical, and communication infrastructure. High responsiveness, especially to client needs, is facilitated by our lean and cost efficient infrastructure. A holistic approach to risk ensures that prudent policies and programs are implemented. The risk management process is closely monitored by the risk, technical and Audit Committees of the Board.

Strengthening our long-term relationships with clients and brokers is also a key facet of our strategy. Our underwriting teams prudently manage the client relationships, and we seek to establish strong links with high-value counterparties. Our markets in Asia are served by the branch in Kuala Lumpur.

Brokers also play a vital role in our business process. Leveraging the strong links, we have established with retrocession insurers, enables us to increase our capacity by reducing risk.

We continuously monitor our financial soundness to ensure the financial health of the Company, with appropriate indicators for all criteria. Some of the criteria are generic while others are specific to the reinsurance industry. Among the criteria monitored are:

  • Capital adequacy and solvency – measured by appropriate ratios
  • Asset quality – this includes quality of investment portfolio and asset liability matching
  • Retro and actuarial provisions – we maintain a high quality retrocession program
  • Management strength – effective enterprise risk management program
  • Earnings and profitability – measured by appropriate ratios
  • Liquidity – we maintain a highly liquid investment portfolio
  • Sensitivity to market risk – Limited exposure to equity markets

8.1 Alignment of performance with the strategy is monitored through a set of Key Performance Indicators (KPIs)

8.2 Common success factors in the reinsurance industry and Saudi Re’s progress

Success factors Description Saudi Re’s Progress
Clear strategy and proposition
  • Clear value proposition improves market perception
  • Accepted role with brokers and cedants ensures continued receipt of premiums from targeted segments
  • Evolving into a large and well diversified reinsurance company
  • Strong and responsive relationships with brokers and cedants
Geographic diversification
  • Increasing diversification both geographically and across lines of business, increases capital efficiency and reduces loss volatility
  • Portfolio is diversified over 9 lines of business and spread across 40 markets
Scale benefit
  • increasing the economic scale, earnings and capital base, and building resilience to loss events
  • Increasing scale is one of our strategic pillars
  • Achieving CAGR ratio of 19% during the last three year (2019-2021)
Strong client/distribution relationships
  • Strong relationships with large international brokers and global distribution platforms, ensure reinsurer receives continued business
  • Competent underwriters will improve ability to generate new business
  • We establish strong links with high value counterparties and our underwriting teams prudently manage the client relationships
High limits/line leader
  • High limits and underwriting capacity increase reinsurers attractiveness
  • Growing ample underwriting capacity and prudently engaging as a lead reinsurer
Active broad range of risks
  • Writing a broad range of risks increases visibility with brokers
  • Showing flexibility on terms improves relationship with brokers
  • Saudi Re offers main lines of business in life and non-life, both in Treaty and Facultative
“A-rated” capital
  • Requirement to compete for attractive business
  • Strongly preferred by cedants and brokers
  • Saudi Re has A3 Credit rating (Moody’s) and high solvency ratio
Robust technical capabilities and operational effectiveness
  • Strict underwriting discipline, active cycle management, and robust internal controls ensure strong technical and investment returns
  • Strong focus on operational effectiveness leads to lower operational costs
  • Investing in technical and technological capabilities while maintaining operating expense within acceptable range