Insurance In

Saudi Arabia

Strategic Marketing Industry

Analysis

2014

Hany Sewilam AbdelHamid

Outline

Overview

Market leaders

Industry future and challenges

Q&A

References

Overview

Insurance Industry Overview

The role of the insurance sector is to be a cornerstone of the Saudi financial services sector by providing reliable risk transfer mechanisms, promoting long-term savings, and being a key enabler of a healthy Saudi economy

The industry has emerged as one of the fastest growing insurance industries in GCC and across the world

Regarding the global economic crisis the insurance industry has marinated its 30-35% annual growth rate

The first Saudi Arabian legislation regulating insurance was enacted in 2003

The regulator is the Saudi Arabian Monetary Agency (SAMA)

Regulatory Environment

Co-operative Insurance Regulations

Foreign Ownership Management and finances

› Board members, senior managers, mergers and takeovers of insurance companies must be approved by SAMA.

› Any change of ownership in shares exceeding 5% must be notified to SAMA.

› SAMA has the right to set minimum and maximum limits of cover and of premiums

› Retention of risk must not be below 30%

Industry Growth

0100020003000400050006000700080009000

10000

P&SHealthGeneral

2010 2011 2012 2013 2014

Am

ou

nt

in M

illio

ns

Years

Gross Written Premiums 2010-2014

Industry Drivers

Low Penetration (total insurance premiums to gross domestic product)

Insurance Density (total insurance premiums to total population)

The number of companies is increasing

Strong government spending

Economic diversification are likely to increase the number of persons opting for insurance plans

Market Leaders

It was the steppingstone to create a viable insurance industry in Saudi Arabia

Providing all types of insurance invested heavily in the development of professional Saudi

insurance employees Contributed to the education and awareness of the society in

regards to insurance Developed new strategies and business plans concentrate on

improvements in customer service, new products, and internal working environment

Market Share for 2014

25.7%

16.3%11.5%

46.5%

Others Companies

• Long experience• New products• Customer satisfaction• Work environment

• Long experience• Tailor-maid solutions

• International Experience• Specialized in healthcare

Market Share for 2014

32.7%

20.5%13.8

%

33%

Others Companies

Strategic Group For Insurance Industry

 

Serv

ice &

C

red

ibility

Extend of ProductsLow

Low

High

High

Malath

ACIG

Industry Future and Challenges

Industry Future

Takaful, Islamic insurance will be the fastest growing segments in the insurance industry in Saudi Arabia and expected to reach 15 billions in 2015

The share of gross health insurance is likely to reach around 65% by 2015

Non-life penetration will rise from 0.98% in 2011 to 1.25% by 2015

General insurance sector is expected to grow around 13% from 2011-2015

Challenges

Issues with Islamic finance increasing levels of competition Lack of awareness No official organization No specialized human resources Moral Hazards and Frauds Too many parties involved in the process

› Official organization (SAMA)› Insurance companies› Service providers› Customers (insured)

Q&A

References

http://www.sama.gov.sa/sites/SAMAEN/Insurance/Pages/AboutISD.aspx

http://www.ameinfo.com/198489.html http://www.zawya.com/arabic/story.cfm/

sidZAWYA20111113104943/ “Saudi Arabia Insurance Market Analysis”, Research report

by RNCOS http://www.argaam.com/article/articledetail/253804