Saudi Arabia’s insurance sector posted 25% earnings increase in H1 2024, reaching SR2.2 billion ($585 million). This robust performance highlights strategic investments and expansions that helped the sector thrive despite broader economic challenges. Saudi Arabia is emerging as a key player in the regional insurance market, signaling its growing influence.
Q2 Performance and Market Leaders
In Q2 2024, the sector’s earnings rose 10% year-on-year, totaling SR1.29 billion. Tawuniya led the quarter, contributing 36% of net income, followed by Bupa Arabia with a 31% share. These companies’ strong performances underscore their leading roles in Saudi Arabia’s insurance sector.
Strategic Expansion and Market Growth
In August, S&P Global highlighted Saudi Arabia’s significant role in expanding Islamic insurance within the Gulf Cooperation Council (GCC). Revenues are projected to surpass $20 billion in 2024, with 15%-20% growth expected next year. Saudi Arabia is the primary driver of this expansion, supported by government initiatives.
Saudi authorities are working to increase insurance coverage across the country. Initiatives like addressing uninsured vehicles and new mandatory medical insurance are expected to boost demand and premium income. This proactive approach is likely to contribute significantly to the sector’s growth.
Despite the sector’s overall strong performance, 14 out of 25 listed insurers in Saudi Arabia reported declines in underwriting results and profits in H1 2024. This highlights the intensifying competition within the market and the challenges insurers face in maintaining profitability.
Health Insurance Dominance
The 2023 Saudi Insurance Market report, released by the Insurance Authority, shows health insurance as the largest sector, growing by 21.4%. Health insurance accounted for 59% of the total gross written premiums, totaling SR38.63 billion. Large enterprises made up 70.1% of this market, highlighting their significant influence.
As more people gain access to health insurance, demand for healthcare services rises, driving sector growth. Analysts expect the Saudi insurance industry to achieve a compound annual growth rate of 5.2% through 2028. Health and motor insurance, expected to comprise 86% of total gross written premiums, drive this growth from SR68.3 billion in 2024.
Future Outlook for the Insurance Sector
The general insurance sector saw significant growth in 2022 and 2023, but analysts expect growth to stabilize from 2024 onwards. The Kingdom’s efforts to diversify its economy beyond oil are likely to create new opportunities for insurance companies across various sectors.
The establishment of the Saudi Insurance Authority in November 2023 underscores the Kingdom’s commitment to developing a robust insurance sector. This regulatory body aims to enhance the sector’s efficiency and foster a business ecosystem aligned with Vision 2030.
