Insurance providers in Saudi Arabia saw their combined profit surge 60 percent year-on-year to SAR 323.6 million (before Zakat) on higher written premiums and a strong retention ratio during the first half of 2015, according to research conducted by Argaam.
The Company for Cooperative Insurance (Tawuniyah) helped boost earnings during the period as it recorded a SAR 315.9 million net profit (before zakat), marking a sharp rise from the SAR 232.8 million reported in H1-2014.
Bupa Arabia For Cooperative Insurance Co. (Bupa) followed, posting a SAR 150 million profit (before zakat) in the first half of 2015, compared to SAR 17.1 million in the same period last year.
Meanwhile, 21 out of the 34 insurers saw profit growth. Two firms witnessed an earnings decline, while 11 companies incurred losses.
Total written premiums rose 23 percent in the first half to SAR 19.18 billion from SAR 15.58 billion in the year earlier period. A total of 28 firms witnessed an increase in written premiums, while six companies saw declines.
Saudi insurers’ average retention ratio reached 82 percent during the period, ranging between 22 percent and 100 percent.
Bupa and Salama Cooperative Insurance Co. (SALAMA) led with the highest retention ratios of 100 percent and 94 percent respectively. Aljazira Takaful Taawuni Co. tailed the list, with a retention ratio of 22 percent.
Sanad Cooperative Insurance Co. sustained losses in terms of subscribed premiums.
Based on guidelines set by the Saudi Arabian Monetary Agency (SAMA), insurance companies in the kingdom are required to retain at least 30 percent of their total insurance premiums and reinsure at least 30 percent within the kingdom.
Saudi insurers’ incurred claims amounted to SAR 10.44 billion in the first six months of the year, up from SAR 8.34 billion in H1-2014. Total incurred claims accounted for more than 54 percent of total written premiums, according to data compiled by Argaam.
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