Saudi insurance sector produces best ever results in 2020: KPMG

The Saudi insurance sector had its best ever year in 2020 according to KPMG. (Reuters)

• The Kingdom’s insurance industry’s cumulative net profit after zakat and tax achieved the highest ever amount of SR1.5 billion ($400 milion)

RIYADH: Saudi Arabia’s insurance sector produced its best ever financial results last year, rising by nearly 50 percent.
The buoyant figures were revealed in a new report by consultancy firm KPMG.
“The insurance industry in Saudi Arabia produced some of its best results during 2020,” the report said.
Gross written premiums grew by 3 percent when compared to 2019 and net profit after zakat and income tax over the 12 months ending Dec. 31, 2020, was 48.3 percent higher when compared to the same period in 2019.
The Kingdom’s insurance industry’s cumulative net profit after zakat and tax achieved the highest ever amount of SR1.5 billion ($400 million), a surge of SR474 million on 2019. Total assets reached SR65.42 billion at the end of the year, against SR59.61 billion in 2019.
Moving forward to the first quarter of this year, income was up 29 percent, while total assets had grown by 7 percent since Dec. 31.
According to the report, health insurance continued to be the largest segment, representing about 59.1 percent of total insurance premiums during 2020.
Simultaneously, in the motor segment, incurred claims were significantly lower last year as the coronavirus disease (COVID-19) lockdown saw less people on the roads. This was offset by the two-month extension on motor policies given to users, resulting in broadly neutral or favorable underwriting results compared to 2019.
Insurance leaders felt more confident over the next three-year horizon, the report claimed, while 62 percent also believed there would be more consolidation in the sector with mergers and acquisitions becoming increasingly common.
Looking to the future, the KPMG 2021 CEO Outlook Global Pulse Survey, which included 50 insurance company chief executive officers across nine global markets, found that investment in digitization would become paramount.
Khalil Al-Sedais, managing partner in KPMG Saudi Arabia’s Riyadh office, said: “Insurers have historically lagged other sectors in their digitization efforts, the COVID-19 pandemic seemed to have brought fundamental change to that.
“We believe that investing in capabilities to jump on the digitalization bandwagon will pay long-term dividends for the insurance industry.”