Insurance
From The Report: Saudi Arabia 2015
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The regulatory intervention that followed intense price competition in 2013 has enabled Saudi Arabia’s insurance market to return to a trajectory of sustainable growth over the course of 2014. Competition in the sector is still stiff, however, with 35 insurance and re-insurance companies in operation as of December 2014. In 2006 the authorities enacted the Health Insurance Law, which initially required all expatriates working in the Kingdom to have private insurance and in early 2011 was extended to cover all private employees. Meanwhile, the cooperative insurance model, a variation on sharia-compliant takaful insurance, continues to grow in the Kingdom, and in 2014 Saudi Arabia accounted for an estimated 48% of global takaful contributions. Elsewhere, local players can expect to benefit from new protocols and regulations that will enable domestic insurers to compete for upcoming mega-projects in the future. This chapter contains an interview with Ali Al Ayed, General Director, Insurance Control Department, Saudi Arabian Monetary Agency (SAMA).

Articles from this Chapter

Overview

Catching up fast: After a tough year, the industry has bounced back strongly and continued expansion is expected
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Following the costly price competition of 2013, which eroded profitability across the sector, the market has responded to regulatory intervention and returned to a trajectory of sustainable growth over the course of 2014. With expansion potential emerging from both big-ticket projects and the high-volume, low-value business at the retail end of the market, 2015 is so far proving to be a positive year for insurance firms. Rapid Development Saudi Arabia’s insurance market is now one of the largest…

Interview

Regulatory changes: OBG talks to Ali Al Ayed, General Director, Insurance Control Department, Saudi Arabian Monetary Agency (SAMA)
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Interview:Ali Al Ayed Given the extensive losses many insurance companies have suffered over the last few years, what changes to the regulatory framework are needed? ALI AL AYED: Establishing and preserving a solid and mature sector has been a top priority for SAMA since the General Department of Insurance Control’s inception, where several initiatives have been developed and undertaken. One of these is the enhancement of underwriting practices, whereby SAMA introduced guidelines that include…

Analysis

A flexible alternative: The cooperative model is a variation on takaful insurance with distinct advantages
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While the rapid development of the global Islamic banking sector has generated plenty of media headlines in recent years, the growth of the takaful industry has attracted comparatively less attention. There are several reasons that can go some way to explain the relatively unheralded expansion of the world’s sharia-compliant insurers. For example, their aggregate asset base is considerably smaller than that of their banking peers, and the adoption of takaful in areas where Islamic banking is well…

Analysis

Challenges and opportunities: New protocols and regulations can help domestic insurers compete for upcoming mega-projects
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Project insurance is nothing new in Saudi Arabia: the insurance market in its modern form emerged in the 1970s, when foreign insurers, brokers and agents opened branches in the country to provide coverage for the spike in construction projects caused by the oil boom of that era. Over successive decades these firms expanded their business to segments that are related to other promising fields of economic activity, such as marine cargo, motor vehicles and contract work, and in more recent years the…