Resilience remained a key contributor to the recovery of global economies as well as the reinsurance industry over the past two years. Beyond the pandemic and the permanent changes it brought about in the reinsurance industry, 2021 presented us with a set of new challenges such as rising inflation levels while natural catastrophes continued to become more frequent.

Saudi Re was established with the very mandate to withstand large-risk events and contribute to building resilience across local and international markets, providing coverage to support our clients in a rapidly evolving risk environment. In line with our long-term strategy towards 2026, we set out with a clear ambition at the onset of 2021 to evolve and diversify as a company that can reliably serve the risk and growing reinsurance needs of the Kingdom, aiming to become among the top 50 global reinsurers.

Progressing towards our goals, our Gross Written Premium (GWP) increased scale by 19.3% to SR 1.1 billion in 2021, marking the highest premium level achieved in the history of Saudi Re and reinforcing our status among the top ranked Middle Eastern reinsurers. The increase in GWP was attributed to business growth across the Kingdom, Lloyd’s market as well as many of the 40 territories in which we operate. In the domestic market, Saudi Re benefitted from regulatory developments and a recovering economy to achieve a 39% growth in GWP. Driven by our focus on diversification, Saudi Re maintained a healthy portfolio composition consisting 57% international business. We recorded a promising 15% growth in GWP in Asia, having had the foresight to understand the region’s substantial market potential. Additionally, Probitas Holdings (Bermuda) Limited, of which Saudi Re acquired a 49.9% ownership stake, also recorded a strong performance in 2021 with its subsidiary Probitas Syndicate 1492 sustaining its ranking among the top performers of Lloyd’s of London for the year. Business development and expanding markets also increased economies of scale for Saudi Re in line with our strategic plan, reducing volatility and enabling our growing portfolio to absorb larger losses.

Driven by our focus on diversification, Saudi Re maintained a healthy portfolio composition consisting 57% international business.

We fortified our robust financial position with a 11.2% growth in our asset base to SR 3.1 billion in 2021 while our technical reserves reached SR 1.6 billion, demonstrating a very healthy solvency ratio of 160%. This strong financial position has contributed to Saudi Re maintaining an A3 insurance financial strength rating by Moody’s in 2021 with a stable outlook, reflecting industry expectations for the Company to maintain profitability, capital adequacy, adequate level of reserves and strong asset quality demonstrated by its investment portfolio.

However, the year under review also witnessed unusual flood events in the Asian book of business and challenging market practices affecting the performance of the Life book business, which resulted in an increase in the net claims incurred. This has moderated the growth of the underwriting income, resulting in the net underwriting income increasing by 3.6% to SR 71.63 million.

Despite these challenging market conditions, Saudi Re maintained its track record of profitability in 2021 by recording a net profit of SR 38.3 million, resulting in a 4.4% growth in total shareholders’ equity to SR 964 million by the end of 2021.

The year also saw our continued investments in digital transformation, human resource development and upgrading technology infrastructure as we further streamlined our operations and progressed towards analytics, data integration, and enhanced data quality. Supported by a strong data framework of globally benchmarked data warehousing and business intelligence infrastructure, Saudi Re also entered into an agreement with the leading catastrophe (CAT) risk solutions company, RMS, to acquire and employ the RMS CAT modelling for better insight into the Asian risk space. This makes Saudi Re the only reinsurer in the region with the analytical and actuarial capabilities along with unmatched data depth to understand uncertainties by leveraging risk-and-region-specific catastrophe modelling.

The development of our human capital remained a key strategic priority with a continuous focus on employees participating in a number of technical and soft skills programs in partnership with highly recognized local and international training providers and business schools as part of the Saudi Re Development Program (SRDP). We increased our Saudi nationalization ratio to 75% in 2021, taking accountability as an industry leader to develop local talent while also contributing towards the Kingdom’s Vision 2030 goals. The proportion of women in our workforce continued its double-digit growth with an 11.5% increase in 2021, bringing the total female representation at Saudi Re to 30.2%.

We have also focused our efforts towards elevating the compliance and regulatory frameworks that guide and govern our operations during 2021. We steadily progressed in our adoption of the new International Financial Reporting Standard IFRS 17 and acquired advanced solutions to enable our transition to fully implement the standard for the annual reporting period beginning on 1 January 2023. Our redeveloped sustainability framework continued to focus on integrating Environmental, Social and Governance (ESG) factors into the Saudi Re business model, making us the first GCC reinsurer to publish a sustainability report and demonstrate voluntary disclosure of our ESG performance, setting exemplary benchmarks for the sector.

Drawing from the success of 2021 and the milestones we marked by surpassing SR 1 billion in GWP, we will continue to strengthen our long-term relationships with clients and brokers as a key facet of our strategy. As we step into 2022, we will continue to focus on playing a more prominent role as a leading national reinsurer as part of our Strategy Towards 2026, leveraging our favorable position in the Saudi market and its vast growth opportunities, while also discovering new markets for internationalization. Saudi Re was named “Reinsurance Company of the Year” at the 8th Middle East Industry Awards 2021, a recognition that will fuel our efforts in the next 12 months as we continue to elevate the benchmark of the regional reinsurance industry.

We thank our employees for their dedication and hard work, and are proud of our achievements in 2021.

Thank you,

Fahad Al-Hesni
Managing Director and Chief Executive Officer