The Saudi insurance market continued its strong growth over H1 of 2014 with gross written premiums expanding 24 percent compared with H1 of 2013, according to a new Best’s Briefing.
The briefing states that independent actuarial reviews imposed by the regulator after a difficult 2013 have had a positive effect on the first two quarters of 2014.
During 2013, the Saudi insurance market underwent extremely challenging conditions contributing to a significant deterioration in operating performance, as highlighted in the Best Special Report, Competition, Growth Dampen Saudi Insurers’ 2013 Performance, released in April 2014.
The independent actuarial reviews imposed by the regulator meant that many insurers were required to materially strengthen claims reserves by year-end 2013, resulting in weakened operating performance and, consequentially, a reduction in risk-adjusted capitalisation for most market participants.
Following the actuarial review of the medical and motor business segments, the main driver for growth has been price increases on these lines.
The market has returned to profitability, producing $45 million of market profit in H1 of 2014.
Many insurers still find the market environment challenging, according to the briefing, with approximately half of market participants producing underwriting losses in H1 of 2014.
