The Saudi insurance sector saw total written premiums grow by 8% to SAR37.89bn ($10bn) in 2019, marking the first increase in three years, says the Saudi Arabian Monetary Authority (SAMA).
In its “Saudi Insurance Market Report 2019”, SAMA says that the increase was led by Health and Property & Casualty classes. Health insurance remained the largest line of business in 2019. Its contribution to total GWP in 2019 reached 59.3% compared to 56.8% in 2018.
The report also says that the insurance market’s net result increased to SAR858m in 2019, compared to SAR183m in 2018, a surge of 370%.
The overall loss ratio remained stable, as improvements in the loss ratio for health insurance were largely offset by an increase in the loss ratio for motor insurance.
The penetration ratio of the sector increased from 1.20% in 2018 to 1.28% in 2019. Insurance density increased by 5.7% over 2018 to reach SAR1,107.
The overall Saudisation ratio increased from 72% in 2018 to 74% in 2019.
The report recaps major regulatory and other developments in 2019. These included:
- The draft of new actuarial work regulations was issued for public consultation during 2019 (final regulations were issued in Q1 2020); the new regulations are expected to enhance the technical rigour in the sector by streamlining and expanding the input from the actuarial profession.
- The sector successfully completed Phase 1 of the IFRS17 implementation journey, and moved on to Phase 2 of the four-phase implementation-journey laid out by the regulator (Phase 2 is due for completion in the first half of 2020).
- Pursuant to the issuance of the Rules for Licensing and Supervision of Branches of Foreign Insurance and/or Reinsurance Companies in Saudi Arabia allowing foreign companies to operate in the kingdom via branch operations, initial approval was granted to a foreign insurer to open a branch in the kingdom.
2019 also saw an increase in consolidation activities, where six companies announced the signing of preliminary memoranda of understanding to assess the feasibility of three mergers in the insurance sector. One of these materialized in the first quarter of 2020 between Walaa Cooperative Insurance and MetLife AIG ANB Cooperative Insurance, being the first-ever consolidation in the Kingdom’s insurance sector.