Insurance companies in Saudi Arabia continued topline growth momentum in 2022 with aggregate GWP’s standing at SR39.28 billion ($10.45 billion), rising 26.8% year-on-year in Q3 2022, as reported by Trade Arabia.
Citing KPMG, Trade Arabia states that most lines of business reported growth in Q3, with motor and medical segments topping the list with the biggest contributions of 78% and 66% to GWPs and net underwriting income, respectively.
It adds that the volatility in the insurance market comparative results, which were visible until the first half of 2022, have settled now in terms of the loss ratios and the net profit after Zakat and tax.
The industry-wide loss ratios and net profit after zakat and tax stand at 81.79% and SR566.12 million as of Q3 2022, compared to 81.36% and SR533.84 million as of Q3 2021, respectively.
The total assets and total equity of the insurance industry stood at SR79.02 billion and SR19.08 billion, showing an increase of 20% and 4.8%, respectively, compared to December 31, 2021.
This represented an annualised return on equity of 3.96% as of Q3 2022, compared to 3.91% as of December 31, 2021, and annualised return on assets of 0.96% as of Q3 2022, compared to 1.08% as of December 31, 2021.
Further, IFRS 17 is set to be applicable in Saudi Arabia from January 1, 2023, as insurance companies are in the implementation and audit phase of the dry-runs for the Saudi Central Bank (SAMA) submission.
Salman Chaudhry, Senior Director and Insurance Lead at KPMG in Saudi Arabia, commented, “The results of these dry-runs, related audit observations and learnings will lay the foundation of the quantitative disclosures relating to the impacts of adoption of IFRS 17 and IFRS 9 in the annual financial statements for the year ending December 31, 2022, as required under IAS 8, and the successful implementation of IFRS 17 in the Kingdom from January 1, 2023.”
Chaudhry also stated that the boost in the digital transformation in the insurance sector in recent years has been most visible in the way companies now interact with their customers through digital channels.
He concluded, “Digitalisation has become the norm, with its benefits now widely recognised by the industry. Companies will have to increase their focus on enhancing their cybersecurity and data privacy infrastructure to protect sensitive customer data.”
