Government advisor outlines financial gains from merger of National and Iraqi insurance companies

On Saturday, the financial advisor to the Prime Minister, Mazhar Mohammed Salih, identified the importance of the merger of the National and Iraqi Insurance Companies on the financial sector in Iraq, while stressing that it would contribute to supporting the reform of the non-banking financial sector.

Saleh said in a statement reported by the official news agency, and reviewed by "Al-Eqtisad News", that "the merger policy between insurance companies has strategic importance for the sector and the companies participating in the merger process, as this importance is primarily directed to enhancing the financial capacity of the two merged companies (the National Insurance Company and the Iraqi Insurance Company), which gives the new merged entity the ability to bear major risks and provide more comprehensive services to customers, in addition to improving efficiency and reducing operational and typical costs that exhaust the capital accumulation of the two companies due to similarity and repetition in activities that have become far from competition in improving insurance innovation or providing an insurance product that suits the economic lifestyle and its developments."

He added, "The merger of the two major companies allows for the unification of operations and systems, which helps reduce administrative and operational costs and increase overall efficiency, in addition to diversifying their insurance products that meet the needs of individuals and society in the current digital age."

He pointed out that "the merger will help the new insurance entity expand its presence in the market, increase its share, and enhance its ability to innovate and market the insurance product, which will enable it to compete more with other companies, while providing financial stability for the merged insurance entity and giving it flexible and efficient negotiating power with customers, suppliers, and others."

Saleh continued, "Achieving development in the insurance industry through merger is the first step towards reforming the non-banking financial sector in Iraq and activating the role of this sector to increase its contribution to the gross domestic product," noting that "improving the performance of the financial market in general and the insurance market in particular affects the confidence of consumers, productive companies, and investors with high degrees of certainty and stability when making economic decisions." 

He pointed out that "when insurance markets are thriving in performance and efficiency, investment spending in society increases, which will accelerate economic growth and prosperity."

Earlier, the Council of Ministers approved the exemption of the contract to study the merger between the National Insurance Company and the Iraqi Insurance Company into one company, from the first paragraph of Cabinet Resolution No. 23545 of 2023, to proceed with the procedures for contracting with a company specialized in auditing and monitoring joint accounts.