RIYADH: The insurance sector in Saudi Arabia witnessed a 26.9 percent growth in 2022 compared to a rise of 8.4 percent in 2021, reflecting the Kingdom’s efforts toward developing the sector.
The total written premium in 2022 stood at SR53 billion ($14.1 billion), up from SR42 billion the year prior, according to the 16th annual report on the insurance market released by the Saudi Central Bank, also known as SAMA.
At the forefront of the sector’s development were health insurance, protection and savings insurance, and motor insurance, reported the bank.
Health insurance, which is still the largest line of business, witnessed a growth rate of 26.8 percent. On the other hand, protection and saving insurance, the smallest line of business, fell from 4.1 percent in 2021 to 3.5 percent last year.
The industry’s positive trend showcases SAMA’s efforts to improve the sector’s efficiency and economic impact through major regulatory developments throughout the year.
In 2022, “the Central Bank … issued several rules and standard policies to accommodate the development in the sector and economy,” noted the report.
These include the Comprehensive Motor Insurance Rules, the Standard Insurance Policy on Domestic Workers Contract, and the supervision of the standard insurance policy of professional indemnity for auditors of the entities by the Capital Market Authority.
The developments also included “the council of ministers’ decision to include more professions on the mandatory medical malpractice insurance,” according to the report.
The report further stated that the insurance sector’s contribution to non-oil gross domestic product rose slightly by 0.18 percent to 2.09 percent. In comparison, the overall loss ratio stayed the same at 83.4 percent.
The net profit in the insurance sector after zakat and tax stood at SR689 million in 2022, compared to a net loss of SR47 million in the previous year.
The Saudization ratio in the insurance sector rose to 79 percent last year from 77 percent in 2021, added SAMA.
In 2022, there were two mergers in the insurance industry – Arabian Shield and Alahli Takaful, and Walaa and Sabb Takaful.
These unions were consistent with the bank’s efforts to promote mergers and acquisitions to have fewer, stronger companies that can deliver in accordance with the financial sector development program and meet the goals of Vision 2030.
SAMA added: “This will also improve the level of protection offered to policyholders, enhance customer services, benefit from economies of scale, promote creativity in insurance product design and attract and retain talented resources.”