Saudi Arabia’s newly liberalised insurance market is poised for major growth with estimates that a market currently worth around US$1.5 billion annually could soar to US$8 billion within 10 years, according to industry experts.
Growth is already happening in one of the major insurance sectors – health cover – due to a combination of new labour laws and the opening of the kingdom’s insurance sector to regional and international competition.
According to Dr Abdullah Al Sharif, Secretary General of the Council for Co-operative Health Insurance at the Ministry of Health, there is huge potential for growth in health insurance which, until now, has contributed less than 0.5% of the kingdom’s gross domestic product.
Al Sharif will be one of a panel of key international and regional speakers taking part in the 2nd Saudi Insurance Summit at the Jeddah Hilton Hotel 28-31 October 2007. The Summit, taking place with the approval of the Governor of Jeddah Prince Mishaal bin Majed bin Abdulaziz, is expected to be attended by more than 300 insurance professionals, regulators and key industry players.
Under a phased programme, some 16 million Saudi citizens are to be covered by a mandatory health insurance scheme and all expat employees will have to be covered by their sponsor and will no longer receive free treatment at government hospitals. The council has instructed companies to furnish details of the health policies, as well as beneficiaries and dependents to insurance companies.
Observers point out that with the kingdom’s population growing at 3.2% annually, growth in the health insurance market is also helping to spur development in the health care and pharmaceutical sectors. A report by the Gulf Organization for Industry Consulting noted that health insurance products, and the entry of the private sector, had provided a fillip to the setting up of new hospitals and polyclinics as well as existing facilities.
The Saudi Arabian Monetary Agency’s opening up of the health and general insurance sectors is estimated to have initially injected about US$700 million into the market with more to come through the raft of new company licensing and initial public offerings currently taking place, bringing feverish activity to the Saudi stock market.
“Saudi Arabia’s streamlining of the insurance industry is proving a major catalyst for dramatic growth levels,” says Deep Marwaha, Conference Manager, of IIR Middle East, organisers of the 2nd Saudi Insurance Summit.
“The new insurance company supervision legislation and mandatory health insurance laws have led many in the industry to forecast excellent growth in the non-life sector in Saudi Arabia with predictions of US$4 billion growth by 2009 being touted.”
Insurance is one of a number of industry sectors liberalised by Saudi Arabia, making the kingdom more attractive to foreign investors. A number of leading international insurance operators have linked with Saudi Arabian partners as a result.
“Within this high growth market, the landscape is shifting dramatically,” said Marwaha. “The 2nd Saudi Insurance Summit aims to ensure that key players keep abreast of new developments in what is a globalised, breakneck business environment.”
In addition to the two-day Summit, there are two practical workshops. The first is on the principles of Islamic insurance – Takaful structures and Shari’ah compliance, conducted by Rodney Wilson, Director of Postgraduate Studies and Professor of Economics at the University of Durham’s School of Government and International Affairs, UK.
A post Summit workshop - Mind the Gap! How Can We Bridge the Insurance Skill Shortage? - will be led by Ian Wilson, Head of Insurance Programmes at the Institute of Banking, Saudi Arabian Monetary Agency.
Among more than 30 leading international and regional speakers taking part in the Summit will be Dr Muhammad Al Jasser, Vice Governor of the Saudi Arabian Monetary Agency; Ali Al Subaihin, CEO of the Company for Co-operative Insurance (NCCI); Brad Bourland, Chief Economist of Jadwa Investment Company, Saudi Arabia; Tal Hisham Nazer, Managing Director BUPA Middle East; and Dawood Taylor, Group Head, Takaful Ta’awuni, Bank Aljazira, Saudi Arabia.
NCCI are diamond sponsors of the Summit; Medgulf and Bank Aljazira are platinum sponsors; Takaful Re is a gold sponsor; and Salama Co-operative Insurance Company is a silver sponsor.
For more information log on to www.insurancesaudi.com
