Saudi Arabia’s insurance market is poised to rebound by the end of the current year and hit a growth rate of 1.1 percent by the beginning of 2015, local media said quoting experts.

However, some companies have faltered by the beginning of 2014 as they increased their provisions to meet claims of customers, Asharq Al-Awsat daily quoted the experts as saying.

Fahad Al-Inazi, an insurance expert, has expressed optimism over the impact of the government decisions related to insurance of high-risk activities, mass-frequented areas and government cars.

The insurance market tends to be more organized, a matter that will have a positive impact on the price index provided more technical provisions are increased while the (government) decisions will contribute to the increase of premiums and, therefore, beneficial to all companies, he said.

In this context, Hani Ashqar, key partner of BWC Middle East, said insurance market in the Kingdom is expected to grow if merger deals are concluded in the next few years, notably in the presence of strict regulatory requirements.

The trend to enter into mergers stems from the company’s desire to avoid risk of low growth and rising costs in light of weak financial results where, according to a report of Saudi Arabian Monetary Agency (SAMA), ten out of 35 insurance companies have incurred losses, he said.

He added that this situation forced some shareholders of small and medium enterprises (SMEs) to inject more funds into those firms to cope with SAMA requirements.

On the other hand, Abdulrahman Ba Ashin, an economic expert, agreed with Ashqar’s approach that the major insurance market in the GCC region should follow merger deals.

He called for the activation of regulatory bodies to encourage and speed up acquisition and merger deals in the insurance sector in the region.

According to an earlier report by SAMA, the number of insurance companies operating in the Kingdom stood at 34 by the end of the third quarter of 2013 whereas the share of premiums to the GDP reached 0.69 percent by the end of that quarter, the local media said.