Saudi insurance sector’s total premium in Q3 rises over 31% to $3.46bn: SAMA  

Update Saudi insurance sector’s total premium in Q3 rises over 31% to $3.46bn: SAMA  
SAMA’s Quarterly Insurance Sector Report revealed that the health sector’s GWP rose by 26.5 percent in the third quarter. (Shutterstock)
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Updated 19 December 2022

Saudi insurance sector’s total premium in Q3 rises over 31% to $3.46bn: SAMA  

Saudi insurance sector’s total premium in Q3 rises over 31% to $3.46bn: SAMA  

RIYADH: Saudi Arabia’s insurance sector recorded a 31.9 percent increase in its total gross written premiums to SR13 billion ($3.46 billion) in the third quarter of 2022 compared to the same period last year, according to a recent report released by the Saudi Central Bank, also known as SAMA.  

Gross written premiums are the total premiums an insurer writes during a specific period before deductions for expenses such as ceding and commissions, and its rise signifies an overall development of the sector.   

SAMA’s Quarterly Insurance Sector Report revealed that the health sector’s GWP, which makes up 58.2 percent of the Kingdom’s overall GWP, rose by 26.5 percent in the third quarter to hit SR7.6 billion compared to the corresponding period of 2021.  

Jarmo Kotilaine, an economist and strategist, focusing on the Gulf region, told Arab News that the increase in the Kingdom’s overall GWP is not necessarily linked to the financial performance of individual companies.   

“Obviously, the companies have benefited from the more benign economic environment and the reduction in risks post-COVID. But the sector is diverse and still quite fragmented. The performance of individual companies varies. This is part of the reason why SAMA has been pushing for consolidation for a long time,” said Kotilaine.   

According to Mohamed Ramady, a London-based economist and former professor at King Fahd University of Petroleum and Minerals, the Saudi insurance sector has turned the corner following the COVID pandemic slowdown.

“The rise in gross written premiums in Q3 2022 indicates that the private and government sector are now more encouraged to take on new business and insure risks, and individuals are also increasing their personal health insurance schemes, with more companies insuring employees in line with government regulations to do so.” 

Moreover, the GWP of motor insurance also rose 30.1 percent in the third quarter to SR2.5 billion compared to SR1.9 billion in the same period last year. Motor insurance makes up 19.4 percent of Saudi Arabia’s overall GWP.   

Other general insurance GWP, which constitutes 18.8 percent of the Kingdom’s total GWP, rose 56.5 percent in the third quarter to SR2.4 billion, compared to the same period in 2021.  

Kotilaine added: “Interestingly, there does seem to be some evidence of product diversification as well. The category of “Other General Insurance” expanded by 56.5 percent year-on-year. While it is still relatively small in aggregate terms, it has somewhat reduced the traditional dominance of health insurance and other policy-driven policies.”   

SAMA report further stated that protection and savings insurance GWP, which amounted to 3.6 percent of the aggregate, saw a 26.5 percent rise year-on-year reaching SR474 million in the third quarter.   

Talking about the insurance sector in Saudi Arabia, Kotilaine noted that the market is heavily dependent on policy-driven compulsory insurance.   

“The market, despite significant development, remains heavily dependent on policy-driven / compulsory insurance, whether health or motor vehicle. Other segments are still relatively small,” he said.  

Despite improving numbers, Kotilaine noted that key metrics of the Saudi insurance sector — notably insurance penetration and density — remain low in global comparison. “The sector is fragmented. Continuing to encourage consolidation will boost productivity and likely accelerate the sector development toward the strategic objectives of the authorities.” 

Ramady noted that the Saudi insurance sector will be faced with challenges in insuring large-ticket government projects and there will be “a need for consolidation in the sector to ensure higher capital adequacy to take on larger insurance risk, something that offshore insurance companies have been doing in the Saudi market.”


Global investment in clean energy to reach over $1.7tn in 2023: IEA

Global investment in clean energy to reach over $1.7tn in 2023: IEA
Updated 13 sec ago

Global investment in clean energy to reach over $1.7tn in 2023: IEA

Global investment in clean energy to reach over $1.7tn in 2023: IEA

RIYADH: As efforts to mitigate the effects of climate change gather pace around the world, investment in clean energy is also witnessing a surge and is expected to reach more than $1.7 trillion in 2023, according to the International Energy Agency.

In its latest report, IEA said the global energy sector is likely to record investment worth around $2.8 trillion this year of which 60.7 percent will go toward clean technologies.

As security and affordability issues brought on by the global energy crisis gain strength, spending on clean energy technologies will outpace spending on fossil fuels, the report predicted.

Green energy includes renewables, electric vehicles, nuclear power, low-emissions fuels, efficiency improvements, and heat pumps.

According to the report, the leftover global energy investments — slightly over $1 trillion — will go toward coal, gas, and oil.

“Clean energy is moving fast — faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Fatih Birol.

He added: “For every dollar invested in fossil fuels, about $1.7 are now going into clean energy. Five years ago, this ratio was one-to-one.”

The report also predicted that in 2023, spending on solar power is due to hit more than $1 billion a day or $382 billion for the year, while investment in oil production will stand at $371 billion.

From 2021 to 2023, annual investments in clean energy are projected to rise by 24 percent, driven by renewables and electric cars, compared to a 15 percent increase in investments in fossil fuels during the same time frame.

The report noted that over 90 percent of this increase emanates from developed nations and China. This poses a severe threat of creating new energy divides if renewable energy transitions do not accelerate elsewhere.

The IEA attributed the stimulated investments in clean energy in recent years to rapid economic expansion and erratic fossil fuel prices that fueled worries about energy security, particularly in the wake of the Ukraine crisis.

Other factors impacting the jump in investments in clean energy include significant policy support through initiatives in Europe, Japan, China, and other regions as well as the US Inflation Reduction Act.   


Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines
Updated 36 min 54 sec ago

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines

RIYADH: A new primary care center and a cultural facility are set to be established in the Caribbean island nation of Saint Vincent and the Grenadines thanks to two development loan agreements worth $16 million. 

Signed by the Saudi Fund for Development, the two new agreements are part of the Kingdom’s framework to support the advancement in developing countries and small island developing states worldwide.

The first agreement will oversee the construction of a primary care center in South Rivers for $6 million, the Saudi Press Agency reported. 

The primary care center aims to improve the quality and resilience of the healthcare sector in the island nation while ensuring that locals have access to the necessary health services. 

It will also help in reducing chronic diseases as well as reducing mortality rates in the region.

The project is expected to create direct and indirect job opportunities and train medical staff. 

Meanwhile, the second agreement worth $10 million was allocated to construct a cultural center and a market for craft and agricultural products in Belle Vue.

The project will promote the country’s craft, handicraft, cultural and creative industries. 

It will also significantly promote tourism, social and cultural growth, and public health.

Together, the two projects will contribute to achieving the UN Sustainable Development Goals, specifically good health, well-being, decent work and economic growth.

“We look forward, through the signing of these two agreements, to opening horizons for development cooperation with the Kingdom of Saudi Arabia and strengthening close relations between the two countries,” Prime Minister of Saint Vincent and the Grenadines Ralph Gonsalves said.

SDF Chairman Ahmed Aqeel Al-Khateeb and Camillo Gonsalves, the minister of finance, economic planning and information technology of the island nation, signed the agreements.

Founded in 1974, the SFD has implemented over 700 projects and development programs in 85 countries worldwide. 


Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz
Updated 56 min 11 sec ago

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz

CAIRO: Saudi venture capital firms are bolstering the regional startup funding landscape, with Nama Ventures and RAZ Group leading the investment round to support the expansion of the UAE-based logistics startup Cargoz in the Kingdom. 

Cargoz, often called the Airbnb for commercial warehousing, has secured an undisclosed amount in bridge funding from Nama Ventures, RAZ Group and a select few angel investors from the UAE and the Kingdom who are players in the logistics industry. 

The company, founded in 2022 by Premlal Pullisserry and Lijo Antony, offers a platform that connects small and medium enterprises with warehouse companies for short-term contracts. 

According to the press release, the company plans to utilize the funds to spur growth in the UAE and prepare for a soft launch in Riyadh by the third quarter of this year. 

Cargoz has reported significant growth over the last eight to nine months, indicating that it addresses a substantial market issue. 

“We underestimated the pain of finding on-demand storage for SMEs and how broken and stressful that experience was,” Cargoz stated in the press release. 

Nama Ventures, known for its 29 investments, including notable startups like Muqbis, Punt Partners and Faceki, expressed great enthusiasm about backing Cargoz. 

“Nothing makes us more excited at Nama Ventures than seeing founders as complementary as Premlal and Lijo. Premlal breaths logistics; his depth of the space and his understanding of the pains in the space are unparalleled. Lijo, on the other hand, is a coder’s coder; he is very well versed in tech space and knows how to build tech products,” said Mohammed Alzubi, founder and managing partner of Nama Ventures. 

In August 2022, Nama Ventures also led Cargoz’s pre-seed funding round with an undisclosed amount used to foster growth in the UAE. 


China’s 1st homemade passenger plane completes maiden commercial flight

China’s 1st homemade passenger plane completes maiden commercial flight
Updated 28 May 2023

China’s 1st homemade passenger plane completes maiden commercial flight

China’s 1st homemade passenger plane completes maiden commercial flight

BEIJING: China’s first domestically made passenger jet flew its maiden commercial flight on Sunday as China looks to compete with industry giants such as Boeing and Airbus in the global aircraft market.

The C919 plane, built by the Commercial Aviation Corporation of China, carried about 130 passengers on the flight, according to the state-owned newspaper China Daily. The jet took off Sunday morning from Shanghai Hongqiao Airport and landed in Beijing less than two hours later.

The flight was operated by state-owned China Eastern Airlines, and the side of the plane was emblazoned with the words: “The World’s First C919.”

The inaugural flight comes as COMAC looks to break into the single-aisle jet market in a direct challenge to Airbus and Boeing. Airbus’s A320 and Boeing’s B737 jets are the most popular aircraft for domestic and regional flights.

While COMAC designed many of the C919’s parts, some of its key components, including its engine, are still sourced from the West.

According to state media reports, the company plans to build 150 C919 planes yearly for the next five years.

The C919, which has been in development for 16 years, has a maximum range of about 3,500 miles and is designed to carry between 158 and 168 passengers.

Over 1,200 C919 jetliners have been ordered, COMAC says, with China Eastern Airlines under contract to buy five of them.


Biden, McCarthy reach tentative deal to raise debt ceiling

Biden, McCarthy reach tentative deal to raise debt ceiling
Updated 28 May 2023

Biden, McCarthy reach tentative deal to raise debt ceiling

Biden, McCarthy reach tentative deal to raise debt ceiling

WASHINGTON: President Joe Biden and House Speaker Kevin McCarthy reached an “agreement in principle” to raise the nation’s legal debt ceiling late Saturday as they raced to strike a deal to limit federal spending and avert a potentially disastrous US default.

Support from both parties will be needed to win congressional approval next week before a June 5 deadline.

The Democratic president and Republican speaker reached the agreement after the two spoke earlier Saturday evening by phone, said McCarthy.

“The agreement represents a compromise, which means not everyone gets what they want,” Biden said in a statement late Saturday night. “That’s the responsibility of governing,” he said.

Central to the package is a two-year budget deal that would hold spending flat for 2024 and impose limits for 2025 in exchange for raising the debt limit for two years, pushing the volatile political issue past the next presidential election.

The agreement would limit food stamp eligibility for able-bodied adults up to age 54, but Biden was able to secure waivers for veterans and the homeless.

The two sides had also reached for an ambitious overhaul of federal permitting to ease the development of energy projects and transmission lines. Instead, the agreement puts in place changes in the National Environmental Policy Act that will designate “a single lead agency” to develop economic reviews in hopes of streamlining the process.

The deal came together after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations by June 5 — four days later than previously estimated — if lawmakers did not act in time to raise the federal debt ceiling.

Both sides have suggested one of the main holdups was the Republican effort to expand work requirements for recipients of food stamps and other federal aid programs, a longtime goal that Democrats have strenuously opposed.

Biden has said the work requirements for Medicaid would be a nonstarter. He seemed potentially open to negotiating minor changes on food stamps, now known as the Supplemental Nutrition Assistance Program despite objections from rank-and-file Democrats.

Americans and the world were uneasily watching the negotiating brinkmanship that could throw the US economy into chaos and sap world confidence in the nation’s leadership.

Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.

Yellen said failure to act by the new date would “cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests.”

The president, spending part of the weekend at Camp David, continued to talk with his negotiating team multiple times a day, signing off on offers and counteroffers.