MANAMA: Consolidation of Bahrain’s insurance sector will enhance the scope of doing better business by relatively strong entities, according to a seasoned banker.
“The relatively small insurance market in size necessitates the existing players to consider consolidation of the sector as strong companies can generate more business,” Solidarity Group Chairman, Khalid Abdulla-Janahi said during a first Press conference after acquiring a major stake in Bahrain’s oldest and well reputed Ahlia Insurance.
“We have a very successful experience of acquiring a company in Jordan and now we are replicating this model in Bahrain and look forward seek opportunities on expansion in the Kingdom of Saudi Arabia and other markets. We always look forward for any opportunity which can add value to the existing business model,” he said, adding that though it took almost seven years to enter the Saudi market but given the importance of market Solidarity would continue to seek new avenues of expanding the business in GCC and beyond.
Bahrain-based Solidarity Group Holding had earlier announced the acquisition of a leading stake worth BD10.7million in Al Ahlia Insurance Company B.S.C in Bahrain.
Khalid Janahi, who was joined by Rashid Al Meer, the Deputy Chairman of Solidarity Group; Ashraf Bseisu, Solidarity Group CEO and Dr. Osama AlBaharna, Chairman Al Ahlia Insurance Company, told reporters that it took almost 18 months of due diligence before the transaction took place. “Merger and acquisition is only way for doing business,” Janahi said, while referring to the size of the market and relatively small companies operating in Bahrain market.
On the possible size and slimming the company’s size after the completion of the merger, Janahi said that it was too early to say and hope keeping the current strength of the staff of 158 out of which over 70% are Bahrainis.
Originally founded more than 40 years ago, Al Ahlia Insurance is one of the oldest and largest insurance companies in Bahrain operating in all classes of insurance. The acquisition deal was completed on Bahrain bourse in a deal worth BD 10.7 million.
“As part of its growth strategy, Solidarity Group actively pursues promising expansion opportunities in the insurance industry locally and within the MENA region as a whole,” Janahi said.
“As a Group, we continue to seek opportunities even if it is an exit from a business,” said Janahi while quoting the successful exist from a Malaysian venture.
“We are delighted to add Al Ahlia Insurance to our portfolio of strategic investments, which we plan to consolidate at a later stage with our existing Bahrain operations through our fully owned subsidiary Solidarity General Takaful B.S.C. (C),” he added.
“Taking into consideration the saturated local market, consolidation becomes a necessity in order to create larger and stronger financial institutions capable of competing locally and offer a unique customer experience. The new merged entity will result ultimately in being the largest Takaful Company and one of the leading top tier insurance players in Bahrain.”
“At this stage, we are working closely with Al Ahlia Insurance to accelerate the transition process and to draw up a post-merger integration plan that best leverages the strengths of the two companies and better serve our client base”. We are relying on our experience in a recent and very similar exercise carried out in the Jordanian market with very successful integration and merger results,” Janahi added.
“Solidarity Group, with its newly acquired subsidiary, will reinforce its position as the leading Takaful Group not only in Bahrain and the region but globally. The growth opportunity in global Takaful and insurance markets is very promising. Our ever-expanding footprint coupled with investment grade credit ratings of our underlying operations, gives us the ideal platform to exploit those opportunities in order to enhance and advance our overall stakeholders value and interests,” the Chairman Solidarity quoted saying on acquisition of stake in Ahlia.
“The acquisition is by far the largest such transaction to take place in Bahrain in the past couple of decades”. We take pride in our strategy to continually develop and improve the insurance markets in which we operate in through pioneering land-mark initiatives. We are looking forward to what we believe will be an exciting era for the Insurance and Takaful industry in Bahrain. We thank the shareholders of Al Ahlia for accepting and approving our offer and we extend our appreciation to the Chairman Dr. Osama AlBaharna and our partners for their support and confidence in Solidarity Group.”
“Concurrently, three committees are working on the various aspects of the deal which also includes the turning the Ahlia business into a takaful, looking into the portfolio of Ahlia whether any current investment portfolio is in conventional insurance business and other formalities of acquisition and merger in line with the regulator’s requirements,” Ashraf Bseisu, Solidarity Group CEO told reporters.
Dr. Osama AlBaharna, Chairman Al Ahlia Insurance Company while highlighting the deal said that it was a natural choice for both entities to join forces to enhance the business base. “We are fortunate that Solidarity Group is at the helm of the affairs and both companies will cater to the needs of the market in more robust way,” he added.
