Saudi Arabian general insurance industry to hit 6.2% growth rate

Written by Michael Griffiths

06/01/2023

Saudi Arabia’s general insurance industry is to hit a compound annual growth rate (CAGR) of 6.2% until 2026, according to estimates from GlobalData.

The Saudi insurance industry will climb SAR 40.3bn ($10.7bn) in 2021 to SAR 54.6bn ($14.5bn) in 2026 in terms of gross written premiums (GWP).

GlobalData highlighted that growth will be driven by an increasing number of natural disasters, as well as government measures to expand health insurance.

According to the analytics firm’s insurance database, Saudi’s general insurance industry is projected to register a slower growth of 5.6% in 2022 and 5.7% in 2023, as compared to 7.5% growth in 2021. GlobalData suggested that growth in 2022 and 2023 will be mainly supported by the increase in demand for health insurance and property insurance.

Personal accident and health (PA&H) insurance is Saudi Arabia’s largest general insurance line, accounting for a 62.5% share of GWP in 2022. It is forecasted to grow at a CAGR of 6.7% between 2021 and 2026, supported by the country’s ageing population and favourable regulatory developments.

Motor insurance is the second-largest insurance line in the country, accounting for a 19.6% share of premiums in 2022. It declined by 2.3% in 2021 due to a price increase caused by inflation of automotive spare parts and a decline in vehicle sales. A recovery in vehicle sales will help motor insurance grow by 2.4% in 2022 and 3.7% in 2023, according to GlobalData’s forecasts.

The third third largest general insurance line is property insurance, accounting for an 11.7% share in terms of GWP in 2022. Property insurance is expected to grow at a CAGR of 7.3% over 2021 by 26. GlobalData added that exposure to natural catastrophe damages will support demand for property insurance in Saudi Arabia as sand and dust storms and droughts are recurring natural events in the country.

Insurance analyst at GlobalData, Manogna Vangari, said: “Favourable regulatory developments and demand for property insurance due to recurring natural disasters will drive growth in the general insurance industry in Saudi Arabia over the next five years.”

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