Walaa Expects Positive Financial Impact from Local Reinsurance Cession Mechanism

Walaa Cooperative Insurance Company announced on Sunday, November 17, 2024, that it anticipates a positive financial impact on its results starting from Q1 2025, following the implementation of a new mechanism for ceding reinsurance premiums to the local market.

The announcement aligns with a circular from the Insurance Authority introducing a phased cession mechanism. It mandates that at least 30% of every reinsurance Treaty Program agreement (both Quota-Share and Excess of Loss) and each reinsurance Facultative Risk (Quota-Share and Excess of Loss) must be assigned to companies licensed to conduct reinsurance activities within the Kingdom.

Licensed reinsurance companies will have the first right of refusal to accept or decline these assignments, with the mechanism becoming effective on January 1, 2025.