Saudi Arabia – Significant decrease in ins. profits in 2018
Thursday, 04 11 2019, Category: Insurance and Reinsurance, Country: Saudi Arabia
The pre-tax income for Saudi Arabia’s re/insurance sector declined roughly 28 per cent to about SR754 million ($201 million) from SR1.1 billion ($293 billion) in 2017, said S&P Global Ratings in a new report.
This assessment from the ratings company comes after 32 of the 33 listed re/insurance companies in Saudi Arabia published their end-2018 financial reports, S&P explained in the RatingsDirect report.
This follows a drop in net profits of about 55 per cent in 2017 from 2016. In addition, the sector posted a 3 per cent decline in gross premiums written (GPW) and a modest increase in overall shareholders' equity.
While 19 of the 32 companies reported weaker earnings in 2018 compared with 2017, Tawuniya and Medgulf, the second-largest and fourth-largest insurers by gross written premiums in the market, reported the largest losses. Tawuniya made a pre-tax loss of SR213 million and Medgulf a loss of SR205 million, mainly due to poor results in their medical books. We anticipate that both insurers will report significantly better results in 2019.
The gross written premium income of the 32 companies that reported their results declined in 2018, due to a combination of slow economic activity, the application of higher no-claims discounts for motor policies, and the departure of more than 1 million expatriates in 2018 as a result of higher taxes on foreigners and more restrictive Saudization policies.