Boston, MA -- (SBWIRE) -- 04/30/2014 -- As of early 2014, the latest results from Saudi Arabia's listed insurance companies (in relation to 2012) highlight the weaknesses rather than the (undoubted) strengths of the sector. The growth of health insurance premiums is slowing: this will constrain the development of the entire sector through the forecast period.

BMI's new insurance report format provides forecasts of the life and non-life markets, including gross and net premiums, reinsurance premiums and assets. Moreover, it provides forecasts for key growth drivers such as vehicle fleet size, demographic factors and private health expenditure. The report also contains a comprehensive breakdown of the non-life insurance market, providing forecasts for motor and transport insurance, property, personal accident, health, general liability and credit insurance. Finally, the new report offers a detailed breakdown of the life and non-life competitive landscapes, covering the top companies present in each segment by premiums and market share.

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As of early 2014, the latest results from Saudi Arabia's listed insurance companies highlight the weaknesses rather than the (undoubted) strengths of the sector. Although insurance is very underdeveloped by most metrics, top-line growth in premiums has been mixed. Companies have had to deal with surging claims expenses, which in some cases have been exacerbated by a deliberate policy of increasing the retention ratio. Generally, though, retention ratios remain low. Investment earnings have been mixed. Worst of all, prices and margins have been compressed by cut-throat competition. This appears to be the consequence of a desperate bid by too many companies, particularly the recent entrants to the market, to boost market shares regardless of profitability.

Previously, we had had some confidence that non-life penetration would rise quite sharply thanks to the growing acceptance of insurance. Over the last five years, the main catalyst for the development of the sector has been the rise in (compulsory) health insurance premiums, which have had a positive impact on both segments. (As is the case with our other insurance reports, we include health insurance in the non-life segment.) However, the pace of expansion in health insurance premiums appears to be slowing.

More recently, though, it has also become obvious that life density is not growing. Moreover, there is no obvious catalyst for a substantial rise in life density - from what remains a very low level - in a country where social security (or government benevolence) for locals is extremely generous.

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