Over 2015 Saudi Arabia's insurance sector will continue to record solid single-digit growth , largely due to steady demand for compulsory, basic lines. Low penetration levels and market fragmentation will remain the greatest barriers to insurers achieving above-average growth in premiums. Despite the opportunity for a period of consolidation over the long-term, we believe that the market will remain relatively unchanged, at least over 2015
BMI takes the view that despite the market achieving solid growth over the forecast period, significant barriers will remain for many insurers. Continued market fragmentation will suppress growth. The main issue is that demand is largely focused on basic compulsory lines. Therefore, insurers can only compete on the basis of price in these lines rather than product innovation. As such they are unable to raise their profitability and capital levels. This prevents them from internally absorbing risk and in doing so boosting their net premium levels. We believe that this will continue to be a problem for the market over 2015 and beyond.
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It appears unlikely that a period of consolidation will occur over 2015. At present small scale insurers are likely to be able to sustain growth by focusing on compulsory, basic lines. However, given the severe price competition and rising claims across many lines, it is possible that in the long-term sub-scale players will be forced out of the market.
The life segment will remain in an embryonic stage of development over 2015 and, in all likelihood, for the remainder of the forecast period. Nonetheless, growth will be strong due to the continued demand of the expatriate workforce, which is likely to expand in line with economic output. However, generous social provisions for the local population means that demand among Saudis for life insurance will remain weak. In addition, some cultural hostility to life insurance, as well as conventional insurance in general, will mean that demand...
The Saudi Arabia Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.
BMI's Saudi Arabia Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Saudi insurance industry.
Key Benefits
* Benchmark BMI's independent insurance industry forecasts for Saudi Arabia to test other views - a key input for successful budgeting and strategic business planning in Saudi Arabia's insurance market.
* Target business opportunities and risks in Saudi Arabia through our reviews of latest industry trends, regulatory changes and major deals, investments and macroeconomic developments.
* Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
Coverage
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
* Life/non-life Premiums: Total premium growth (USDmn), premium growth (% y-o-y), penetration (% of GDP), density (USD per capita) for Life and Non-Life sectors, claims reinsurance, and assets and liabilities.
* Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor, transport, property, personal accident, health, general liability and credit financial).
BMI’s Insurance Risk Reward Index
BMI’s Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.
Company Profiles*
Examines the competitive positioning and short- to medium-term business strategies of key industry players. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Growth Drivers & Risk Management Projections
Key data and forecasts to end-2019 focusing on the growth drivers and downside risks to specific insurance lines including:
* Population: Male/female, by age group, active/pensionable/youth population % of total, urban/rural population % of total.
* Freight: Tonnage – air freight, rail freight, road freight, inland waterway.
* Motor: Fleet size by type of vehicle % change y-o-y.
* Epidemiology: Disease Adjusted Life Years and private health expenditure.
Market Overview & Rankings
Illustration of the insurance industry via rankings tables comparing gross written premiums by company (USDmn) and market share (%) for the top 20 players in both Life and Non-Life. This chapter also includes in-depth regional analysis of the market position, business strategies and investment potential of the leading insurance companies.
Sources
The insurance Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
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