KSA – The Ins. Sector achieved record profits in Q2
Monday, 09 07 2020, Category: Insurance and Reinsurance, Country: Saudi Arabia
It is a strange coincidence that the covid19 crisis was beneficial to the insurance sector, which achieved record profits in Q2 due to the total and partial confinement. This caused a decrease in the number of traffic accidents as well as a decrease in the number medical Out Patient visits. Therefore, the amounts of claims paid by insurance companies decreased by 26% compared with the first quarter of year 2020. Moreover, the net profits of insurers increased even though the written premiums decreased, so liquidity also increased especially at companies that have weak cash flows. What happened in the second quarter will not happen again and the claims will return gradually to normal when the economic activities will improve during the third quarter. However, the suspension of classes, which are replaced by online learning will decrease the motor traffic activity.