June 18, 2024

Saudi Arabia in the pursuit of creation of an entity alongside $29Bn in holdings by merging their insurance and pensions funds


Core Highlights so far:

  • The Saudi Arabian cabinet had approved off about the merger of the General Wing of Social Insurance as well as the Public Pension Agency.
  • Saudi Arabia, the major Arab League Economy, is on pursuit of uniting their general insurance as well as the public pension funds to form a public sectoral entity that is $29 Billion within the domestic as well as foreign stock holdings.
  • As according to the Saudi Press Agency, the kingdom’s cabinet had already agreed for the merger of Saudi Arabia’s General Organization for Social Insurance (Gosi) as well as the Public Pension Agency.

The Minister of Finance Mohammed Al Jadaan, also the chairman of the Gosi’s Board, commented recently that; “The combination of the two state-run funds is an extension of “continuous reforms” and part of an organisational restructuring process, in line with the kingdom’s Vision 2030 objectives.”

The Minister also added out that; “The initiative underscores the importance of the social insurance sector “as [a] symbiotic system which has an important role in enhancing social protection for all citizens.”

Mr Al-Jadaan also stated out that; “The merging process will strengthen the fund’s financial position by maximising investment returns and will enhance investment performance and strategic diversification” of its portfolio of investments.”

He as well as added out that; “The merger will convey social benefits exposure for public and private sector workforces under one insurance scheme and will support to eliminate duplication of processes. It will also upsurge “operational and financial efficiency” and recover services.”

As according to the data amassed from Bloomberg, these funds uphold noteworthy stakes within the Saudi Arabian firms, that also comprises of an accumulated $8.5Bn holding within the Saudi National Bank, the kingdom’s major Bank within the assets. It also manages out a $4.3Bn stake within Al Rajhi Bank.

The public entities, whose collections also comprised the real estate, domestic and foreign bonds holdings, also hold stocks valued at $207 million in drug and potential medical pharma maker AstraZeneca and $170m in HSBC.

The kingdom, which is the global major oil exporter, is attempting to fundamentally altering its economy. Like the rest of its peers in the six-member economic bloc of the GCC, Saudi Arabia is uniting and rearrangement of its public sector firms to gain scale and progress efficiencies in the wake of the three-year oil rate collapse that commenced in 2014.

It merged eight public development organizations engrossed on agriculture, human progression, industrial expansion and real estate, among others, to produce the National Development Fund in 2017, to diminish the rate and swiftness progress of public sector projects, counting mega infrastructure schemes.



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