In the wake of the newly liberalized economy and growing awareness of healthcare insurance besides general insurance, the Saudi Arabian insurance market is on growth trajectory.
As per a recent report “Opportunities in Middle East Insurance Market” by RNCOS, the Saudi Arabian insurance market is propelled mainly by four factors - increasing awareness level, expected obligatory medical insurance, growing foreign penetration, and government support. It is projected that the net value of the insurance market in Saudi Arabia will grow at a CAGR of 21.20% during 2007-2011.
Also, going by the Saudi Arabian Monetary Agency (SAMA), Saudi Arabia's neo-liberal insurance market is under the limelight, because it is anticipated that the market, currently valued at around $1.5 Billion per annum, could skyrocket to $8 Billion in the coming ten years (2007-2017), as reported by Gulf-Daily-News.
The SAMA reported that the insurance market, in 2006 alone, registered a growth of 35% while the gross premium shot to $1.8 Billion in 2006, up from $1.3 Billion in 2005. Even general insurance premiums, comprising 65% of the insurance market, rose by 25% to $1.2 Billion in 2006 as against $959 Million in 2005.
The primary growth fuelling factor for the Saudi Arabian insurance industry is the emerging healthcare industry of the country. Attractively packaged new healthcare insurance schemes are enticing the consumers. Besides, increasing education level is also helping in shooting up the insurance concern amongst people. The prospering automobile sector as well as the housing industry is further strengthening the Saudi Arabian insurance industry scenario.
Several insurance experts believe that this rapid growth has been catalyzed by two regulatory modifications within the non-life insurance segment in the Kingdom. One is the Co-operative Insurance Companies Supervision Act, which gave the first formal regulatory framework for the region’s insurance market, and the other is the new law making it mandatory for all expatriate workers to be health insured by their employers.
As the insurance industry helps in making the country’s economy healthy, the government is showing significant concern towards this industry. SAMA organized an insurance summit during October 28-31 2007, in which the central bank approved 26 local and foreign insurance companies to launch operations in the Kingdom. Experts believe that the new laws and new licensed companies will boost confidence in the industry by curbing the activities of unlicensed companies.
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