News MiddleEast16 Apr 2018

Saudi Arabia:Insurance market sees 59% drop in profits in 2017 on flat topline growth

| 16 Apr 2018

The Saudi insurance sector has seen a severe plunge in aggregate profits of 59% with insurance companies' profit before zakat reaching SAR1 billion (US$267 million) against SAR2.5 billion in 2016, according to corporate disclosures on Tadawul, the Kingdom's stock exchange

GWP for the Saudi insurance market in 2017 remained flat, totalling SAR35.4 billion against SAR35.8 billion in 2016.

The industry's profits have been largely skewed by the big losses registered by three operators, namely, MedGulf which registered losses of SAR388 million, Company for Cooperative Insurance (Tawuniya) SAR143.5 million, and Saudi Indian Company for Cooperative Insurance (Wafa Insurance), SAR32 million. In contrast, these three insurers had reported net profits in 2016.

Furthermore, MetLife AIG ANB posted losses of SAR57.8 million for 2017, 164% higher than the SAR21.9 million losses reported for 2016.

Overall, eight out of the 32 insurers in Saudi Arabia ended 2017 in the red compared to five in the preceding year, including Mediterranean and Gulf Cooperative Insurance and Reinsurance (MedGulf) and Tawuniya who are among the top five players in terms of premium income. At the same time, profits of 12 insurers dropped in 2017 while the net results of four other providers continued to be in the red.

As for the top line, the GWP of 16 insurers fell, of which Malath Cooperative Insurance and Reinsurance (Malath) saw the sharpest decline of 66.5%. The increase or decrease in the top line of individual insurers is not necessarily a good indicator of growth in the companies’ market shares in 2017 especially because several insurers had been suspended from writing motor or medical cover for various lengths of time, that could be as long as four months for some.

The aggregate results do not include the country’s sole local reinsurer, Saudi Re whose profits soared by more than 110% to SAR39 million in 2017 while premiums dropped by 4.4%.

The table below summarises the financial performance of the insurance companies in Saudi Arabia for 2017:

Company     
GWP
SAR'000
GWP % Change
Net Profit/Loss before Zakat
SAR'000
2017 2016 2017 2016
Bupa Arabia 7,732,961 7,938,630 -2.59 500,614 630,705
Tawuniya 8,406,669 8,055,135 4.36 -146,544 800,947
Al Rajhi 3,193,474 1,948,650 63.88 182,870 99,027
MedGulf 2,665,838 3,194,334 -16.54 -388,026 67,611
AXA 1,499,477 1,153,974 29.94 60,187 42,677
Wala 1,102,332 1,016,608 8.43 141,731 117,318
Salama 750,691 571,353 31.39 65,492 30,350
SAICO 804,577 801,506 0.35 51,927 58,172
SNIC 578,701 507,708 13.98 44,708 38,745
Allianz Saudi Fransi 925,537 836,272 10.67 34,918 24,430
Ahli Takaful 353,113 353,279 -0.89 38,531 33,337
Ubited 580,565 819,595 -29.16 36,608 99,768
Arabian Shield 593,078 754,470 -21.39 108,175 80,950
ACIG 429,972 510,618 -15.79 18,117 8,344
MetLiife  AIG ANB 354,880 208,090 70.54 -57,806 -21,855
Trade Union 831,249 954,483 -12.91 67,020 44,963
Wafa 499,995 550,807 -9.23 -32,680 59,656
Buruj 511,509 437,566 16.90 97,748 90,969
Malath 726,978 2,167,856 -66.47 -11,028 -150,174
Al Sagr 329,307 176,014 87.09 20,849 166,810
Enaya  274,822 128,825 113.33 -14,519 -25,824
Arabia 314,391 419,191 -24.98 15,822 8,447
Al Alamiya 263,369 310,751 -15.25 44,485 46,346
Ahlia 183,219 167,142 9.62 11,416 -14,844
Alinma Tokio Marine 296,723 321,888 -7.82 -3,319 -17,437
SABB Takaful 175,084 194,368 -9.92 -5,485 11,855
Chubb 220,498 214,837 2.64 37,675 37,303
Solidarity 136,134 262,447 -48.13 34,072 43,561
Gulf Union 359,627 277,376 29.65 27,373 22,629
Aljazira Takaful 85,620 82,655 3.59 31,069 25,919
Gulf General 185,627 255,152 -27.25 19,584 24,908
Amana 71,967 169,866 -57.63 753 11,720
Total 35,437,984 35,764,656 -0.91 1,032,337 2,497,333
Saudi Re 942,007 985,510 -4.41 38,878 18,464

 

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