Saudi Arabia's insurance sector is expected to grow remarkably in four years, with premiums increasing at a compound annual growth rate of around 15 percent during 2011-2014. In a new research report, "Saudi Arabia Insurance Market Analysis", RNCOS said key growth areas, such as takaful insurance and bancassurance, will drive the market in the future. The Kingdom's gross insurance premium reached SR16.4 billion ($4.4 billion) in 2010, the report said, as the insurance market "has undergone a transitional phase over the past few years" backed by factors such as rising disposable income and strong economic performance. It added that enforcement of compulsory health insurance system on citizens and expatriates will also act as a significant driver. The report indicated that the Kingdom's aviation insurance sector has crafted a niche for itself by being one of the fastest general insurance businesses. Though quite small, gross premiums in aviation insurance market posted Y-o-Y growth of around 75 percent in 2010. Further, it is expected to maintain the growth momentum in the coming years as the number of fleets continues to expand in the Kingdom. Earlier, three insurance companies listed on the Tadawul Stock Exchange registered improvement inn their net earnings. Wataniya Insurance Company's net profit in the second quarter of this year amounted to SR5,419 thousands. Net profit during the first quarter amounted to SR2,479 thousands, representing an increase of 118.59 percent. Net written premium during the second quarter amounted to SR15,708 thousands. Total operational surplus (less policyholders investment income) in the period amounted to SR5,817 thousands. The Mediterranean & Gulf Cooperative Insurance & Re-insurance Company (Medgulf) said it recorded SR55 million net profit in the second quarter compared to SR54,77 million for the same quarter of the previous year, or an increase of 0.4 percent. Net profit in first quarter reached SR7,33 million. The net claims incurred for the second quarter reached SR406.62 million compared to SR356.36 million for the same quarter of the previous year, an increase of 14.1 percent. Allied Cooperative Insurance Group (ACIG) was back in the black in the second quarter with net profit of SR158 thousands, compared to a net loss of SR4,689 thousands for the same quarter of the previous year. Net surplus of insurance operations after deducting the return on investments of the policyholders during the second quarter reached SR316 thousands, compared to deficit of SR4,693 thousands for the same quarter of the previous year. Net written premiums climbed to SR36,725 thousands in the second quarter, compared to SR6,947 thousands for the same quarter of the previous year, an increase of 429 percent.
