SABB Set to Introduce New Insurance Brokerage Firm
A new insurance brokerage service aimed at assisting over 3,000 small and medium enterprises to manage risk will be launched in the Kingdom soon.
Clive S. R. Bannister, group managing director, Insurance, HSBC Insurance, said at a press conference here yesterday that the new company, SABB Insurance Services Limited (SISL), will be a joint venture between SABB and HSBC Insurance Brokers. Dr.Yazid A. Al-Ohaly and David R. Hunt, chairman and managing director respectively of SABB Takaful, were also present.
Bannister said the new brokerage company, will complement the activities of SABB Takaful, the bank’s Islamic insurance company, another joint venture with HSBC, which was launched earlier this year. Together, the two organizations will enable SABB to offer a full range of insurance products to all types of customers in the Kingdom, from individuals to major corporations. To be capitalized at SR3 million, the new company will have a dedicated team of professionals to provide risk assessment and insurance advice for companies operating in the Kingdom. Located in Riyadh initially, SABB Insurance Services will open branch offices in Jeddah and Alkhobar, where it will provide local services to companies across the Kingdom and through the HSBC international network.
Estimates put the current Saudi insurance market at SR8 billion with an anticipated growth of 125 percent to SR18 billion by 2012. “We see a huge market potential, since the current volume of the insurance market, at SR8 billion, gives a penetration rate of only one percent of the GNP. This is a very small figure, given the size of the Kingdom’s population of 23 million,” Bannister said.
In reply to a question from Arab News, Dr. Yazid Al-Ohaly, SABB Takaful’s chairman, said the new company will embark on expansion and training programs to take advantage of the current economic boom, when oil prices are hovering around $92 bpd. “We shall not only expand our operations but also launch training programs for our employees. It will be a mix of in-house training and also in partnership with HSBC at its facilities in London and Malaysia. More Saudis will be recruited as we set up new branches.”
Asked how he sees the market potential, the group managing director said: “Saudi Arabia is an important market for HSBC Insurance – dynamic, with great potential for growth, and with customers who value innovative, ethical products and world-class service. We are delighted to show HSBC’s continuing commitment to the Kingdom by investing and participating in the venture with SABB.”
He pointed out that SABB’s partner in the brokerage venture, HSBC Insurance Brokers, brings over 30 years’ experience of operating in the Gulf and has been recognized as a leading international insurance broker, with offices in the UAE, Oman, Sweden, UK, China, Taiwan, the Philippines, India, Korea, Singapore, Bermuda and Italy.
David Hunt, SABB Takaful’s managing director, said when the company (SABB Takaful) was launched last year, the share price then was SR10 each. “Today the market value stands at SR140-150 per share. This should give an idea of the company’s performance on the stock market. We, therefore, see good prospects for the new company, too.”