Despite a growing market and cheap reinsurance the Saudi insurers are reporting poor results
Saudi Arabia’s principal regulator has helped fuel the growth of the insurance industry through mandated compulsory coverage, but according to S&P Global Ratings, “its imposition of conservative reserving practices has weighed on insurers’ near-term earnings and solvency.”
Of the 32 active insurers in Saudi Arabia, S&P Global Ratings found 20 to be “achieving reasonably satisfactory performance”; on the other hand, the remaining 12 insurers – 40% of the whole – reported “disappointing” and in some cases “negative” results for H1 of 2016.
S&P Global Rating s analyst David Anthony said: “Several companies can claim to be still-maturing start-ups not yet generating sufficient business volumes relative to high fixed costs. But overall, insurance in Saudi Arabia is clearly not without its problems.”