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Saudi Arabia Insurance Report Q1 2011
Business Monitor International, Feb 2011, Pages: 75
The Saudi Arabia Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Saudi Arabia's insurance industry.
But for the underdevelopment of the life segment, Saudi Arabia would be the most attractive prospect for international insurance companies that are looking to operate in the Gulf Cooperation Council (GCC) countries. Virtually all other trends are favourable and the market has been opened up to foreign competition. New laws are promoting the development of health insurance and Saudi Arabia’s economy withstood the downturn in energy prices through 2009 well.
Saudi Arabia’s insurance sector differs from others in the Middle East in that it includes at least one indigenous insurer, Tawuniya, that would rank as a large company in most countries. Figures released by Tawuniya to the Tadawul stock exchange on which it is listed indicate that its premiums nearly doubled over the course of 2009. In contrast, the next two largest players, Medgulf (a regional insurance company substantially owned by Saudi interests) and Bupa Arabia (the partly owned subsidiary of UK health insurance giant Bupa), lost ground.
This report provides a breakdown of the market shares of the various market participants. It also provides a breakdown of the insurance sector by line, from the point of view of the regulator or trade association. The Saudi market is dominated by health products, which is double the value of the next most popular insurance category, motor. They account for about 40% and 20% of the insurance products marketplace respectively.
At the time of writing, BMI has been able to ensure that the report includes actual data for 2009. BMI has generally been able to use data published in 2010 to adjust the estimates for the year as a whole. Taking into account the results published by the listed Saudi insurers for the first nine months of 2010, BMI estimates total premiums for the whole year of SAR18,342mn. This includes non-life premiums of SAR16,938mn and life premiums of SAR1,404mn. In 2015, the corresponding figures are forecast to be SAR34,359mn, SAR30,132mn and SAR4,227mn. In terms of the key drivers that underpin the forecasts, BMI expects non-life penetration to rise from 0.98% in 2010 to 1.25% by 2015, and for life density to increase from US$15 per capita to US$41 over the same period. BMI’s Insurance Business Environment Rating for Saudi Arabia is 53 out of 100.
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