Saudi Arabia’s insurance sector posted a surge in net income for the second quarter compared to the same period last year.
Net income increased by 434% to 940 million riyals ($250.7 million) compared to 176 million riyals in Q2 2019, according to a report from the central bank released on Wednesday (September 30).
The Saudi Arabian Monetary Authority (SAMA) said this is due to the significant increase in operating income from 99 million riyals to 709 million riyals, which was partially offset by a decrease in investment income of 16.2%.
Gross written premiums nudged up by 5.1% to 8.7 billion riyals but net earned premiums were flat at 7.722 billion riyals.
Corporates still make up the lion’s share of clients, at 63.5%, followed by retail (15.6%), medium enterprises (12.3%), small businesses (5.8%), and micro enterprises (2.9%).
The biggest line of business growth was protection and savings insurance, at 32.9%, followed by a 25.4% uptick for other general insurance, and 6% rise in motor premiums.
Health insurance decreased by 2.1%.
Share of premiums for each business line Q2 2020 vs. Q2 2019:
- Health insurance: 55.6% vs. 59.7%
- Motor insurance: 21.8% vs. 21.6%
- Other general insurance: 18.9% vs. 15.8%
- Protection and Savings insurance: 3.8% vs. 3%
The biggest growth in claims was for protection and savings insurance, that saw a 26.2% rise to 166.5 million riyals.
The largest drop in claims was 164.3% to -0.1 million riyals, by the aviation sector that was largely grounded due to lockdowns and the closure of international borders amid the pandemic.
Saudi Arabia has a low insurance penetration rate, of 2.6% of non-oil GDP in Q2 2020. Insurance penetration of total GDP in Q1 2020 was 1.9%.
SAMA lists 32 insurance and reinsurance companies as at mid-September, one of which it states as inactive.
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