Riyadh – Mubasher: Standard & Poor's Ratings Global (S&P) expected that the Saudi insurance market may witness modest growth at best in 2017.
The rating firm added that this growth would be largely supported by the authorities' pursuit of motorists and employers that have so far not taken out the cover required under Saudi law.
The report issued on Thursday stated that 2017 may be defined by mergers and acquisitions, as the sector finally starts to consolidate.
"Our ratings on Saudi insurers saw some unanticipated volatility in 2016, largely due to internal, company-specific factors, although average performance across the sector improved," Standard and Poor's said.
Saudi Arabia succeeded in turning the unregulated insurance market into the largest non-life and health insurance market in the GCC region, and the most actively regulated insurance market in the Middle East.
As per the sector's most recent results, 2016 domestic gross written premiums are estimated at SAR 35.8 billion ($9.5 billion), the report mentioned.
Unlike most neighboring markets, the KSA was able to avoid excessive price competition to a great extent in recent years, despite the often intense competition between the sector's 34 licensed insurance companies.
The agency noted that Saudi market leaders, Tawuniya and Bupa Arabia, achieved a combined market share of 44.7% in 2016 and generated 57.4% of the sector's total net income.
The eight largest companies by premiums captured 73.9% of total premiums and 66.2% of the total net income. Subsequently, smaller insurers struggled to achieve sufficient scale, S&P said.
