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Sep
23
AXA partners with Wasilah in Saudi Arabia
Posted on Sep 23, 2011 by Sergio Ulloa (G+)
This week, Europe's second largest insurer AXA selected Wasilah Insurance Agency to be its new business partner in the Kingdom of Saudi Arabia. The deal comes as part of the French insurance company's plans to further develop and promote its products in the Gulf region. On September 20th 2011, AXA Cooperative Insurance Company, the French insurance company's Saudi Arabia-based shareholding company, signed a 10 year renewable agency contract with Wasilah Insurance Agency. Through this partnership, Wasilah has been given exclusive rights to market, distribute and sell all AXA-branded insurance products currently offered in Saudi Arabia. AXA has been a key player in the Gulf and Middle East for over 60 years, offering a wide range of insurance products and services for corporate and individual clients in the region. In 2008, the company formed a co-operative insurance subsidiary in Saudi Arabia, called AXA Cooperative, and launched their company's Initial Public Offering, which was over 5 times over-subscribed, in April 2009. Initially licensed to cover only motor and health policies, the insurer received final regulatory approval from The Saudi Arabian Monetary Agency (SAMA) last year to fully carry out its cooperative insurance and reinsurance business in the Kingdom of Saudi Arabia. AXA's interest in developing a greater presence in Saudi Arabia is well founded. With a population exceeding 27 million people, Saudi Arabia is the largest market in the GCC, and the insurance sector has developed substantially since the business was first permitted in the 1990s. Driven by strong macroeconomic performance (tied to a global rise in oil prices), rising income levels and positive demographic trends, the Saudi insurance market has grown by double digits for the past 5 years. In 2010, the Kingdom's insurance sector grew by a further 12.2 percent, passing SAR 16.4 Billion (US$ 4.4 Billion) in gross insurance premium. This has all happened while the Kingdom's non-life and life insurance penetration, at 1.0 percent and 0.1 percent, remain amongst the lowest in the region. According to a recent report by Alpen Capital, Saudi Arabia's insurance sector could reach US$9.24 billion in total written premiums by 2015 at an 18 percent combined annual growth rate. Due to an ageing population and regulatory initiatives, Saudi Arabia will be the only GCC market in which sales of new life insurance policies are expected to grow faster than that of non-life products. While the main business lines in the Saudi insurance industry have been health insurance and motor insurance retail cover, takaful insurance also has a significant presence in the Kingdom and their continued development will improve awareness and acceptance towards other lines of insurance in the region. Increased participation from the international private sector is also expected to yield additional positive returns. This anticipated surge in demand for international insurance expertise in Saudi Arabia has pushed AXA to both improve upon their product portfolio in the region and seek out local business partners to enhance their immediate distribution platform. AXA's new policies in Saudi Arabia will primarily cover retail products, but also will cater to the Kingdom's growing SME sector. The new lines of business will include motor, property, marine and medical insurance as well as other protection options. Through their new tie-in with Wasilah, AXA's products will initially be sold through the agency's headquarters in Riyadh. Within the next three years this network will be expanded significantly across the Kingdom, with around ten more agencies scheduled to be opened in Jeddah, Riyadh and Dammam. Wasilah's head office in Riyadh will be responsible for supporting all new branches in addition to supervising its overall operations. Speaking at the signing ceremony, AXA Cooperative Director Jerome Droesch asserted that their new partnership with Wasilah would give AXA the necessary edge to capitalize on Saudi Arabia's remarkable market potential and take on the three leading players (Tawuniya, Medgulf and Bupa Arabia) in the retail and SME insurance sectors. "We see tremendous growth coming from KSA. We were very pleased to be granted our insurance license last year. Wasilah Insurance is a fitting partner to promote AXA Cooperative Insurance's products and services in the Kingdom and they will be a key contributor towards our gaining dominance in the Personal Lines and SME line of business. It should represent as much as 15 percent of AXA Cooperative premiums in 3 years," Droesch said. According to Business Monitor International estimates, the Saudi population is one of the fastest growing in the world and is estimated to double by 2023. This substantial increase in the population not only increases the probability of insurance policies being taken out but also the number of Saudi locals able to work in the industry. Droesch explained that AXA would work hard to ensure the development of their insurance business contributed to the overall economic growth of Saudi Arabia. "This partnership shows that AXA will continue to invest in the region and our focus will be to seize the huge potential this market has to offer. We will leverage our international expertise and adapt our services and offerings to suit the local Saudi clientele. We will also continue investing in our employees and will use the large pool of well educated Saudi nationals as a prime source of recruitment and expertise," Droesch remarked. Khalid Al Rubaian, Board Member and Owner of Wasilah Insurance Agency, welcomed AXA's involvement with his agency. Wasilah is a newly licensed agent but staffed with experienced insurance industry professionals, and with the right product portfolio could excel in the Saudi market."I'm sure with AXA international expertise and the experience and knowledge of the Wasilah Board and Management supported by insurance matter experts with locally based expertise of international quality and standards; we will make a difference in the industry," Al Rubaian. AXA Cooperative Managing Director Paul Adamson, concluded the event, saying that their upcoming partnership with Wasilah brought them one step closer to fulfilling their overall commitment to expand AXA's operations throughout the Middle East and match the evolving needs of their international clients. "Our customers will now be able to access us quicker and more easily½We trust that this reputation will carry us forward as we continue to grow and introduce new products to the kingdom," Adamson said. French Insurance Companies Mentioned AXA
AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA's operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.
Wasilah Insurance Agency
Wasilah Insurance Agency is a newly licensed insurance agency, providing multiple types of coverage options in the Kingdom of Saudi Arabia. The headquarters are based in Riyadh and additional 2 regional offices are scheduled to open in Jeddah and Dammam in 2012.