Saudi insurance sector to grow in 2022; 3 insurers dominate 83% of market: Official

Logo of Adel Al-Eisa, Media Spokesperson for Insurance Companies in the Saudi Market

Saudi Arabia is vigorously pushing ahead with the creation of more economic opportunities and launch of mega projects, which will positively impact all sectors, including insurance, said Adel Al-Eisa, Media Spokesperson for Insurance Companies in the Saudi Market.
 

In an interview with Argaam, Al-Eisa expected the insurance sector to grow this year, especially with the government's efforts to ensure the availability of insurance products meeting the society needs. He also forecasted a rebound in the number of insurance products, with the return to normal life following the COVID-19 pandemic.
 

Further, the official indicated that two health insurance companies account for 75% of the local market, while the three largest firms dominate 83%, adding that there are 28 licensed companies in the Kingdom.
 

The private health insurance covers about 30% of the working population, and is mandatory for some employees in the private sector and some other sectors.
 

The prices of health insurance policies and products were set based on several factors, including entitlements and features of the main insurance policy, in addition to the strategy of insurers and internal cost structure.
 

Touching on the application of the IFRS 17, Al-Eisa said the insurance sector has long been a special case with regard to financial reporting. “Due to the complexity of the insurance sector, in terms of its accounting nature and implied difficulty in determining the return like any other commercial activity, the sector became different from its peers. This makes the insurers’ financial statements different from others,” the official noted.
 

The insurance contracts-related IFRS 17 was applied in 2021 to identify the insurance contracts and their rules, as well as clarify the mechanism of application and implications thereof.
 

“The IFRS 17 “the Insurance Contracts” is the first international standard with a unified approach about the accounting of insurance companies. It aims to establish specific bases, with which the insurers handle their insurance contracts,” the official said. He added that this, accordingly, results in transparent financial reports including quality accounting information accepted by all parties involved.
 

Elsewhere, Al-Eisa said the Saudi Insurance Symposium (SIS) has been organized by the Saudi Insurance Committee since 2011. SIS’ sixth edition will be held under the auspices of Fahad Al Mubarak, Governor of the Saudi Central Bank, with the participation of Mohammed Al-Jadaan, Minister of Finance and Chairman of the Financial Sector Development Program Committee.
 

The symposium will discuss the important role played by the insurance sector in the national economy, its close relation to various economic sectors, contributions to risk management, promotion of local investments, and deepening of the concept of saving.