Saudi insurance premiums rise in Q2, medical inflation catches eye

RIYADH, Nov 05 (Arab News): Saudi Arabia's insurance sector surged 24 per cent in gross written premiums to SR15.12 billion ($4.03 billion) in the second quarter compared to SR12.17 billion in the year-ago period.
According to the Saudi Central Bank, also known as SAMA, health insurance was the dominant line of business in the sector during that term.
Health insurance accounted for the largest share of total GWPs in the second quarter at 59 per cent.
The category grew 30 per cent in GWPs to SR8.8 billion during the period under review.
Motor insurance, which accounted for 21 per cent of total GWP, came a close second at SR3.12 billion.
The category grew about 43 per cent in GWPs from SR2.12 billion in the second quarter of 2022.
Engineering insurance, a specialized form tailored to construction, engineering projects and heavy machinery operations, exhibited remarkable growth, surging 94 per cent and amassed SR507 million, despite its relatively small market share.
The launch of the authority marks the latest step taken by the Kingdom to regulate, supervise, control, support and enhance the Saudi insurance sector.
Adel Al-Eisa, Media spokesperson for Insurance Companies in Saudi Arabia
According to Saudi-owned Bupa Arabia, the two main factors propelling the growth of health insurance in the Kingdom were the rising number of insured individuals and the advent of medical inflation.
The health insurance company, in its second quarter report, found that the total number of insured people reached 11.8 million in the first half, up from 10.4 million in the same period the previous year.
Out of the total insured in the first half, Saudi nationals hiked 8 per cent to 4.3 million compared to the corresponding period last year.
The number of insured expatriates, on the other hand, grew 4 per cent to 7.6 million.
As per the International Monetary Fund, the reduction in overall unemployment in Saudi Arabia to 4.8 per cent by the end of 2022, down from 9 per cent during the COVID-19 pandemic, can be attributed to a surge in labor force participation.
This reduction results from the increased presence of Saudi workers in the private sector and a rebound in the number of expatriate workers, particularly in the construction and agricultural sectors, surpassing the levels seen before the onset of the pandemic.
According to the General Authority of Statistics, the unemployment rate in the Kingdom recorded 4.9 per cent in the second quarter.
In terms of employment's impact on health insurance, it is essential to note that the Cooperative Health Insurance Law mandates that employers must provide medical coverage to their employees and their families.