Saudi Arabia’s general insurance industry is set to grow at a compound annual growth rate (CAGR) of 5.2% from SAR68.3 billion ($18.2 billion) in 2024 to SAR83.7 billion ($22.3 billion) in 2028, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.

GlobalData’s Insurance Database reveals that Saudi Arabia’s general insurance industry is expected to grow by 8.1% in 2024. The growth will be supported by the health and motor insurance lines, which together accounted for 86% of the general insurance GWP in 2023.

Sutirtha Dutta, Insurance Analyst at GlobalData, comments: “The Saudi Arabian general insurance industry witnessed high growth of 27.7% in 2022 and 22.8% in 2023. The growth was supported by favorable regulatory developments in motor and health insurance lines, rising construction activities, increasing preference for specialized healthcare, and growing motor vehicle sales.”

The growth is expected to normalize from 2024 onwards, in line with the economic growth as the country witnesses a shift from an oil-based economy to develop other sectors that include transport and logistics, clean technology, and metals and mining.

Personal Accident and Health (PA&H) insurance is the leading line of business, accounting for a 63.2% share of general insurance GWP in 2023. PA&H insurance grew by 25.5% in 2023, driven by a rise in health awareness and growing demand for specialized healthcare. According to the Council of Health Insurance, private health insurance beneficiaries are expected to increase from 11.5 million in 2022 to 25 million by 2030.

The government’s push for healthcare transformation under the Vision 2030 program will also support the growth of PA&H insurance. The program aims at the privatization of the healthcare sector and improving access to healthcare by offering better quality of services, enhancing e-health services, and launching digital solutions aimed at improving public health and preventing diseases.

The gradual application of mandatory health insurance measures by the government will also support PA&H insurance growth. In Saudi Arabia, health insurance is now mandatory to renew the residency for expats as well as for all citizens working in the private sector. In October 2023, the government launched a new mandatory health insurance program for foreign tourists, including pilgrims and Umrah performers, with a coverage of $26,660. PA&H insurance is expected to grow at a CAGR of 6.3% during 2023-28.

Motor insurance is the second largest line of business, accounting for a 23.1% share of the general insurance GWP in 2023. Motor insurance is expected to grow by 41.4% in 2023, driven by growing vehicle sales. According to the Industrial Center, which is the industrial development organization of the government of Saudi Arabia, vehicle sales grew by 3% in 2023 to reach 6,60,000 units as compared to 6,41,000 units sold in 2022.

Saudi Arabia is emerging as one of the global leaders in the electric vehicle segment. According to the International Energy Agency, electric car sales are expected to grow by 35% in 2023 as compared to 2022, which will support motor insurance growth.

Favorable regulatory developments will also support motor insurance growth. In November 2023, the Saudi Central Bank (SAMA) implemented the comprehensive motor insurance policy to broaden the motor insurance coverage that includes coverage for relatives, private drivers, and sponsors of the insured. This change is expected to increase the motor insurance premium rates which will support motor insurance growth. Motor insurance is expected to grow at a CAGR of 5.0% during 2023-28.

Property insurance is the third largest line of business, accounting for a 9.1% share of general insurance GWP in 2023. Property insurance is expected to grow at a CAGR of 5.9% during 2023-2028, primarily driven by ongoing construction projects under the Vision 2030 scheme. The program includes developing mega-cities, housing programs, improving infrastructure, and fostering tourism, which will support the growth of property insurance.

Marine, Aviation, and Transit (MAT) and Liability insurance accounted for the remaining 4.5% of the general insurance GWP in 2023.

Dutta concludes: “The expansion of the healthcare and construction industries as part of the Vision 2030 program will drive the growth of Saudi Arabia’s general insurance industry. The country’s shift from an oil-based economy will promote development in other sectors and provide growth opportunities for general insurers over the next five years.”