Cairo – Decypha: The Saudi Arabian Monetary Agency (SAMA) has introduced several initiatives over the past decade, accounting for the industry’s massive market growth in in the insurance market in the Gulf Cooperation Council (GCC) region, according to the Saudi Gazette.
Saudi Arabia now has the most actively regulated insurance market in the Middle East, S&P Global Ratings said in a report
Domestic gross premium written (GPW) for 2016 are estimated at SAR 35.8 billion ($9.5 billion), based on the sector’s most recent results.
GPW across the sector grew by 0.5% in 2016 and net income improved by 139% with actuarial pricing and sharp increase in cash deposits yields allowing insurers to make noticeable gains.
The sector’s net income for 2016 rose by 139.2% to SR2.5 billion compared to 2015 SAR 1 billion. Pricing on medical improved, despite falling volumes, and motor tariffs nearly doubled during 2015 and 2016.
Until the end of 2015, the effect of improved pricing was depressed by residual losses and unexpired risk reserving from the 2013 and 2014 underwriting years. In effect, it was only high expense and tax ratios that prevented many companies from reporting strong results last year, as loss ratios were generally satisfactory.
The sector’s income and more than doubled in 2016 with more insurers turning a profit. Out of the 33 operating insurers in 2015 and 2016, 14 reported net losses totaling SAR707.7 million. The remaining 19 reported profits totaling SAR1,751.2 million.
In 2016, only six insurers reported net losses in 2016 totaling SAR244.7 million and the remaining 27 reported combined profits of SAR 2,741 million.
The total shareholders› funds for the sector increased by 17.6% in 2016 to SAR13.7 billion.
Saudi Arabia has avoided excessive price competition in recent years in the sectors’ 34 licensed insurance companies. Two companies Weqaya and Sanad are currently closed to new business with share trading suspended.
