Health insurance in Saudi Arabia is expected to continue to grow in 2020 following the introduction of temporary insurance for pilgrims from abroad, says Fitch Ratings.
The international credit rating agency said, “We expect this growth to be substantial. These policies will be comprehensive, providing health coverage, including medical examinations and hospitalisation, for the time pilgrims stay in Saudi Arabia.
“The policies are expected to account for over SAR3bn ($800m) of premiums (about 8% of total insurance premiums) and cover about 17m people annually,” Fitch said.
Health is the largest insurance segment in Saudi Arabia. Health premiums grew in 2019 after the revision of the Council of Cooperative Health Insurance’s tables of benefits led to price increases.
Recovery expected in motor
Fitch also believes that motor premiums will recover in the medium term as enforcement on uninsured vehicles is expected to improve. The government seeks to reduce uninsured vehicles to 25% of the total number of vehicles from 55%, in the next two years. Premiums should also increase gradually following the decision to allow women to drive from 2018, as should vehicle sales. In 2018 and 2019, premiums declined as a result of average premiums falling by 25%, mainly driven by no-claims discounts. This decline was partly offset by a rise in the number of vehicles being insured.
Medical and motor insurance segments together account for over 80% of total gross written premiums in the Saudi market.