The insurance sector in Saudi Arabia grew 2.3 percent in 2020 with total written premiums reaching SR38.78 billion, according to the Saudi Central Bank (SAMA) 14th annual report on the Saudi insurance market, issued on Thursday.
The report highlights the performance of the insurance sector in Saudi Arabia in 2020; and the sector’s contribution to the Kingdom’s gross domestic product (GDP).
Energy and Accident & Liability insurance classes showed a notable increase in written premiums. The penetration ratio of the sector increased from 1.3 percent in 2019 to 1.5 percent in 2020. In terms of the underwriting performance, the overall loss ratio positively improved to reach 77.5 percent.
Insurance net profit (after zakat & tax) for the sector increased by 61.1 percent; compared to the previous year’s corresponding figure, thereby improving the return-on-assets and return-on-equity ratios.
The report noted also that the overall Saudization ratio increased from 74 percent in 2019 to 75 percent in 2020. These positive results came despite the difficult times the sector faced during the COVID-19 pandemic.
The report also highlights major regulatory and other developments during the year, including the issuance of new Actuarial Work Regulations, the rules governing the activities of insurance aggregators, and standard Policy for Inherent Defects Insurance and Rules for Comprehensive Insurance of Motor Vehicles Financially Leased to Individuals, in addition to the constant progress in IFRS17 implementation journey, as well as the ongoing merger and acquisition in the sector.