JEDDAH — The Saudi Arabian insurance market is expected to soar from the present around $1.5 billion annually to $8 billion within 10 years, according to industry experts.
The market was liberalised recently, and growth is already taking place in one of the major insurance sectors — health cover.
According to Dr Abdullah Al Sharif, Secretary-General of the Council for Co-operative Health Insurance at the Ministry of Health, there is huge potential for growth in health insurance which, until now, has contributed less than 0.5 per cent of the kingdom's gross domestic product (GDP).
Al Sharif will be one of a panel of key international and regional speakers taking part in the 2nd Saudi Insurance Summit in Jeddah from October 28-31, according to information made available to Khaleej Times here.
The opening up of the health and general insurance sectors is estimated to have initially injected about US$700 million into the market with more to come through the raft of new company licensing and initial public offerings currently taking place, bringing feverish activity to the Saudi stock market.
"Saudi Arabia's streamlining of the insurance industry is proving a major catalyst for dramatic growth levels," said Deep Marwaha, conference manager, of IIR Middle East, organisers of the summit.
Under a phased programme, some 16 million Saudi citizens are to be covered by a mandatory health insurance scheme and all expat employees will have to be covered by their sponsor and will no longer receive free treatment at government hospitals. The council has instructed companies to furnish details of the health policies, as well as beneficiaries and dependents to insurance companies.
The new insurance company supervision legislation and mandatory health insurance laws have led many in the industry to forecast excellent growth in the non-life sector in Saudi Arabia with predictions of $4 billion growth by 2009.
Insurance is one of a number of industry sectors liberalised by Saudi Arabia, making the kingdom more attractive to foreign investors. A number of leading international insurance operators have linked with Saudi Arabian partners as a result.
"Within this high growth market, the landscape is shifting dramatically," said Marwaha. In addition to the two-day Summit, there will be two practical workshops. The first is on the principles of Islamic insurance — Takaful structures and Shariah compliance, conducted by Rodney Wilson, director of postgraduate studies and professor of economics at the University of Durham's School of Government and International Affairs, UK
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