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Mar 2024

Saudi Arabia: Combined GWP surges but net profit stays flat

Source: Middle East Insurance Review | Dec 2022

Listed insurance companies in Saudi Arabia saw an increase of 26% in their combined top line in 3Q2022, with premium volumes increasing to SAR40bn ($10.6bn) from SAR32bn in the corresponding period in 2021, according to an analysis by actuarial consulting firm, Badri Management Consultancy.
 
Among 26 listed companies covered in the analysis, 23 exhibited growth in gross premiums in the first nine months of this year.
 
The top five insurers in terms of premiums in 3Q2022 were: Bupa Arabia, Tadawul, Al-Rajhi, MedGulf, and Walaa. Together, they dominated the market with aggregate premiums of SAR28bn or 70% of the industry total.
 
However, despite the strong growth in the top line, the aggregate net profit before zakat was SAR885m in 3Q2022, compared with SAR895m in 3Q2021 indicating that profitability has decreased significantly since last year. 15 out of 26 companies were able to generate profits in the first nine months of this year.
 
Bupa Arabia alone reported a net profit before zakat of SAR804m for 3Q2022.
 
If Bupa Arabia and Tawuniya were excluded from the analysis, the insurance industry would have suffered a huge plunge in profits, ending up with net losses of SAR309m in 3Q2022 compared with net profits of SAR179m for the corresponding period last year.
 
As compared to last year, two companies are omitted from the analysis – SABB Takaful and Alahli Takaful. Because SABB Takaful and Walaa Cooperative Insurance completed their merger in October 2022, SABB Takaful is missing from both current and previous values. However, as the merger between Alahli Takaful and Arabian Shield Cooperative Insurance was completed in January 2022, Badri shows Alahli Takaful’s financial figures for 3Q2021 and 3Q2022 when the merged entity is Arabian Shield Cooperative Insurance.
 
The financial results of the insurers were obtained from published, unaudited preliminary financial statements. M 
 
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