Underwriting Sustains Profitability In Saudi Arabia's Increasingly Competitive Insurance Industry Jan 12

Standard & Poors, January 2012

Abstract
Domestic insurers in the Kingdom of Saudi Arabia (KSA) have seen their business expand very quickly in recent years as health insurance has become widespread. Once it became mandatory for expatriate staff in 2008, medical insurance spread to domestic employees, and is now the biggest line of business in the Kingdom. Compared with insurers in Western markets, insurers in the KSA tend to focus more on achieving a return on equity through underwriting alone. Investment strategies are conservative, and contribute little to the industry's overall good profitability. But as competitive pressures increase, Standard & Poor's Ratings Services expects that it will be harder for companies to maintain underwriting discipline. The Saudi Arabian Monetary Agency (SAMA), which regulates insurance in the...

Companies mentioned in this report are: Tawuniya/The Company for Cooperative Insurance,Saudi Re for Cooperative Reinsurance Co.,Wataniya Cooperative Insurance Co.,Weqaya Takaful Insurance & Reinsurance Co.,Malath Cooperative Insurance & Reinsurance Co.,Mediterranean & Gulf Cooperative Insurance and Reinsurance Co.

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Tawuniya/The Company for Cooperative Insurance,Saudi Re for Cooperative Reinsurance Co.,Wataniya Cooperative Insurance Co.,Weqaya Takaful Insurance & Reinsurance Co.,Malath Cooperative Insurance & Reinsurance Co.,Mediterranean & Gulf Cooperative Insurance and Reinsurance Co.

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