Agreement to establish a Joint Venture Company in Saudi Arabia
Tokio Marine Holdings, Inc.
2-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo
TSE code number: 8766
- Management
Tokio Marine Holdings, Inc. (hereinafter "Tokio Marine", President: Shuzo Sumi) has reached an agreement with Alinma Bank, one of the largest banks in the Middle East region as the strategic partner to establish a joint venture composite insurance company in Saudi Arabia. Tokio Marine's shareholding of the new company shall be made through its wholly owned subsidiary, Tokio Marine & Nichido Fire Insurance Co., Ltd.
Tokio Marine has signed a memorandum of agreement to establish a joint venture composite insurance company with Alinma Bank, a newly established Saudi Public Sector initiative with strong capital base to support Saudi Arabia's ambitious development programme, as the strategic partner. Alinma Bank is one of the largest banks in the Middle East region in terms of capital and is listed in the Saudi stock market. SABIC Industrial Investment Co., a wholly owned company of Saudi Basic Industries Corporation (SABIC) would also join as a main shareholder.
In order to cultivate the vast untapped retail market where many are not comfortable with conventional insurance products from religious point of view, Tokio Marine shall develop various customer-oriented "Takaful" products of high quality commensurate with its rated security and promote them in partnership with Alinma Bank which has set high standards of Sharia compliance in its banking products.
The new company will be the sole Japanese owned licensed insurance company in Saudi Arabia qualified with the recently introduced insurance regulations, and would enable Tokio Marine to directly meet demands of its Japanese corporate clients for insurance coverage relating to their mega projects such as oil refinery plants, petrochemical plants, etc.
Tokio Marine has been operating in Saudi Arabia for several decades to provide insurance services mainly to its Japanese corporate clients through its local agent. By the establishment of the new company, Tokio Marine will continue to deliver insurance services (safety and security) in Saudi Arabia through Sharia compliant solution by "Takaful" or Islamic insurance products. The commencement of operations of the new company is tentatively expected by the end of 2010, subject to necessary approvals by the related regulatory authorities of Japan and Saudi Arabia and IPO process in the Saud Stock Market (Tadawul).
Tokio Marine is a leader amongst global financial and insurance groups in "Takaful" business with its direct "Takaful" operations in major Islamic countries such as Saudi Arabia, Malaysia, Indonesia and Egypt. The group also has a rated re-"Takaful" company in Singapore and carries out strategic takaful R&D functions for the entire group through its "Takaful" centre of excellence based in Dubai, UAE.
Overview of the new joint venture company
(@SR 3.75/US$)
| 1. Company Name | Tokio Marine Saudi Arabia Ltd. (planned) | |
|---|---|---|
| 2. Location | Jeddah, Kingdom of Saudi Arabia | |
| 3. Major Business | Takaful (both Family Takaful and General Takaful) | |
| 4. Business launch | Tentatively expected by the end of 2010 | |
| 5. Capital | SR 200 million (equiv. to approx. USD 53.3 million) | |
| 6. Shareholders | Tokio Marine & Nichido | 28.75% |
| Alinma Bank | 28.75% | |
| SABIC group and others | 12.50% | |
| Initial Public Offering (IPO) | 30.00% * | |
- *
in line with the local insurance regulation, 30% of its shares shall be allocated to the public.
Outline of Alinma Bank
(@SR 3.75/US$)
| 1. Company Name | Alinma Bank (A Saudi Joint Stock Company) | |
|---|---|---|
| 2. Location | Riyadh, Kingdom of Saudi Arabia | |
| 3. Major Business | Commercial Bank, Investment Bank | |
| 4. Date of establishment | March 2006 (business launched in July 2009) | |
| 5. Capital | SR 15.0 billion (equiv. to approx. USD 4,000 million) | |
| 6. No. of branch | Headquarter and 13 branches in 8 cities | |
| 7. No. of employee | Approx. 1,050 | |
| 8. Shareholders | Public Investment Fund | 10.0% |
| General Organization for Social Insurance | 10.0% | |
| Public Pension Fund | 10.0% | |
| Introduced Stock | 70.0% | |
- *
Data as of December 2009
