The report said protection, savings and health are the fastest-growing insurance lines in the Kingdom. Health insurance accounted for around 50 per cent of the overall insurance market at the end of 2009.
The health insurance sector is expected to grow at a faster pace on the back of increasing involvement of private companies and the obligation for foreign nationals and pilgrims to buy insurance covers. In addition, the most recent introduction of compulsory health insurance for private employees, irrespective of the size of the company they are working with, will further boost the health insurance market in the country, the report said.
Moreover, the general insurance category has shown substantial growth despite being heavily hit by the financial crisis. It is expected to grow at a compound annual growth rate, or CAGR, of more than 24 per cent between 2010 and 2012, owing to rising motor and energy insurances. Property and aviation insurances are expected to emerge as the fastest-growing general insurance segments during this period.
The motor insurance segment is projected to grow at a CAGR of 30 per cent between 2010 and 2012. The fast growth rate will be achieved on the back of promotional strategies deployed by government. With the strong prospective growth in auto sales, the premium of motor insurance will increase as vehicle insurance has been made compulsory in the country.
Earlier, another report said Saudi Arabia would be the most attractive prospect for international insurance companies that are looking to operate in Gulf Cooperation Council countries.
The report also noted that virtually all other trends in the Kingdom are favourable and the market has been opened up to foreign competition. New laws are promoting the development of health insurance. It added that Saudi Arabia’s economy has withstood the downturn in energy prices through 2009 well.
It said 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 insurance company in most countries.
Data about Tawuniya published on Tadawul Website showed that its premiums nearly doubled over the course of 2009. By contrast, the next two largest players — Medgulf (a regional insurance company substantially owned by Saudi Arabian interests) and Bupa Arabia (the partly-owned subsidiary of UK health insurance giant Bupa) — lost ground.
The Saudi Arabian market is dominated by health products, which is double the value of the next most popular insurance, motor. They account for around 40 per cent and 20 per cent of the insurance products marketplace, respectively.
The report forecast total premiums of SR17,480 million in 2009. This is made up of non-life premiums of SR16,784 million and life premiums of SR696 million.
In 2014 the corresponding figures are forecast at SR44,618, SR43,295 million and SR1,323 million.
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