JEDDAH: Comprehensive regulation of the Saudi traditionally unregulated insurance markets has dramatically reshaped that market, and ultimately improved it to international standards, according to a new report published by Standard & Poor's Ratings Services, titled "Saudi Arabian Insurance In 2011: Steady Growth In Insurable Activity Offset By Softening Rates." Government legislation has helped translate the Kingdom's economic development into tangible premium income. A series of recent laws has made it compulsory for the Kingdom's population of around 26 million to obtain insurance for motor third-party liability, and for employers of the many foreign workers in the country to take out group medical cover. Similarly, many companies and professionals are also now obliged to buy a variety of professional indemnity covers. "Although growth in total market premium levels may have slowed in 2010, as economic activity slows and as competition drives down market rates, the sector remains far from mature," said Standard & Poor's credit analyst David Anthony. "There is, for example, still considerable potential for growth in life assurance and long-term insurance savings. Further rapid growth would also occur in medical insurance if, as is currently being considered, families are encouraged to take out health cover for their domestic employees." Anthony further said "we currently expect a number of changes, of which the most dramatic will be further concentration of market share. We anticipate that the six or seven largest companies will write over two-thirds of the premium available in the domestic marketplace. At the same time, there will likely be a degree of orderly consolidation between middle-ranking insurance companies, and a remaining tail of very small, very focused niche companies, each concentrating its efforts on a strictly defined target market."
