News Middle East28 Nov 2019

Saudi Arabia:Insurance mart to grow at 5% CAGR till 2024

| 28 Nov 2019

Saudi Arabia's insurance market is estimated to reach $12.8bn in 2024, registering a CAGR of 5.0% from 2019, says Alpen Capital (ME), a Dubai-headquartered investment banking advisory firm, in a report on the GCC insurance industry.

Non-life insurance

The non-life segment is expected to grow at a CAGR of 5.0% to reach $12.4bn in 2024, primarily led by mandatory insurance business lines. Furthermore, an increase in the number of women drivers, which is likely to grow by 3.0 million in 2020, is expected to facilitate the growth of the motor insurance segment.

Other factors, such as an increased focus towards investments in the nonhydrocarbon sectors aiding job creation and visa reforms for tourists, as part of the Kingdom’s 2030 vision, is likely to drive the scope of insurable assets. Saudi Arabia currently has more than 5,000 capital projects worth approximately $1.6tn in the preexecution stage, which hold significant potential for the Kingdom’s insurance sector .

Life insurance

The life insurance segment is estimated to grow at a CAGR of 4.2% to reach $0.4bn in 2024. Despite having a large population base, the departure of expatriates from the Kingdom due to the localisation drive and the lack of awareness of life products amongst locals are expected to slow down the underwriting business in the short-term.

The slowdown in population growth, coupled with tight regulatory oversight, will also continue to weigh on growth of life premiums.

Consolidation

The report notes that nevertheless, the gradual pick-up of economic conditions and introduction of minimum capital requirements for Saudi Arabian insurers, which could lead to a wave of consolidation in the country, are likely to strengthen the position of the sector. Consequently, insurance penetration and density in Saudi Arabia are expected to reach 1.4% and $339.5, respectively, in 2024.

 

 

| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.

 

Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.