- Home
- Middle East Reports
- Saudi Arabia Report
- Saudi Arabia Sectors
- Saudi Arabia Insurance
- Insurance Industry in Saudi Arabia: Industry Outlook 18% Growth
Saudi Arabia Report
Marcopolis presents the Saudi Arabia Report focused on the investments, doing business, economy and other topics featuring interviews with key executives. The sectors under review in this issue are industry, real-estate, ICT, investments, banking sector, telecom sector and many more.
VideoMay 26, 2014
Insurance Industry in Saudi Arabia: Industry Outlook 18% Growth
- Written by Jacques Yétérian
- Published: May 26, 2014
The insurance industry grew at an astounding rate of 18% in 2013. For the 2014-2015, the CEO of AXA Cooperative Insurance Company predicts lesser growth and consolidation in the industry.
"Out of the top ten companies, only three have made a profit last year. The strain will continue through this year although I think it will improve over the next twelve months. I think we will see more companies returning to profitability over the next year," says Gary Levin.
According to a report by Capital Standards, "The Saudi Arabian insurance industry's profitability has improved since 2010. The loss ratio has increased from 59.85% in 2010 to 67.93% in 2012, reflecting a decline in the underwriting strength of the insurance companies. If the current increasing trend of loss ratio is continued, it will impact the profitability of the insurance operations in the long run. However, a decline in the cost structure1 of the insurance companies has enabled the industry to improve the combined ratio. It is important to note that the cost structure ratio of the top three insurance companies is less than 5.00%. The low cost structure gives the top three insurance companies a competitive advantage over their smaller peers in the Saudi Arabian market. The combined ratio has been less than 100% since 2011, at an average of 95.31% over the past three years. This indicates that the insurance operations are profitable; however, returns from the investment portfolio affect the overall profitability of the insurance industry."
