Saudi Insurance Sector Profits Grow 10 Times
The Saudi Arabian insurance sector experienced a tenfold increase in profits in the first nine months of 2023, reaching an impressive 2,678 billion Riyals.
This growth is a testament to the sector’s resilience and adaptability in the face of global economic fluctuations.
In 2022, the sector’s profits were 689 million Riyals, contrasting sharply with a net loss of 47 million Riyals in 2021.
This turnaround highlights the sector’s successful strategies in overcoming challenges.
The 10.4% growth in 2023 is attributed to the robust performance of the Saudi economy, increased vehicle sales, and a thriving construction industry.
The establishment of the Insurance Authority (IA) as a unified and independent regulator marks a significant regulatory milestone.
This development will intensify competition and foster sectoral growth, benefiting both regional and global insurers.
The general insurance industry saw a 27.7% growth in 2022, the highest year-on-year growth in 13 years.
Factors like mandatory health insurance for expats and a rise in vehicle sales contributed significantly to this expansion.
Key Segments of Sector :
Personal Accident, Health Insurance
This segment, holding a 62.6% share in 2023, is driven by rising health awareness and increasing healthcare costs.
The demand for private health insurance is projected to grow by 11.8% in 2023.
Representing 19.1% of the sector in 2023, motor insurance is anticipated to grow by 5.2%, supported by rising vehicle sales and premium rates.
Property insurance, constituting 11% of the sector in 2023, is fueled by the growth of the construction industry and Saudi Arabia’s susceptibility to natural disasters.
Post the massive growth in 2022, a gradual normalization of growth rates is expected in 2023 and 2024.
The industry’s expansion over the next five years will be driven by sustained economic growth, favorable regulatory developments, and rising automobile sales.
The Saudi Arabian insurance sector’s remarkable growth over the past decade is a clear indicator of its integral role in the national economy.
The sector’s future looks promising, with continued expansion anticipated in various segments, bolstered by supportive economic and regulatory environments.
As the sector evolves, it will likely contribute significantly to the diversification and strengthening of the Saudi economy.
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