S&P Global: Saudi Arabia’s Insurance Market Is a Major Driver of Revenue Growth in Gulf Region

 Traffic jam on a street in Riyadh (Asharq Al-Awsat)
 Traffic jam on a street in Riyadh (Asharq Al-Awsat)
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S&P Global: Saudi Arabia’s Insurance Market Is a Major Driver of Revenue Growth in Gulf Region

 Traffic jam on a street in Riyadh (Asharq Al-Awsat)
 Traffic jam on a street in Riyadh (Asharq Al-Awsat)

Islamic and Takaful insurance companies in the Gulf Cooperation Council region continue to benefit from favorable growth prospects, mainly driven by high demand for insurance in Saudi Arabia, the largest Islamic insurance market in the region, according to a report by Standard & Poor’s Global credit ratings agency.
Credit Analyst at S&P Global, Emir Mujkic, said: “While we expect overall credit conditions for Islamic insurers will remain stable over the next 6-12 months, consolidation will likely remain a hot topic among smaller and midsize players. About one-fifth of Islamic insurers in Saudi Arabia and about one-third in the United Arab Emirates (UAE) merged in recent years.”
He added that competition is expected to pick up in some markets, with anticipated interest rate cuts starting from September and potentially more volatile capital markets that could lead to “a sharp decline in earnings in 2025 if Islamic insurers fail to maintain their underwriting discipline.”
S&P Global estimated the Islamic insurance sector in the GCC region to expand by about 15 to 20 percent in 2024, with revenues exceeding USD 20 billion.
It also expected the Saudi market to remain the main driver of revenue growth in the GCC region.
“We expect the Saudi market, similar to the past two years, will be the main driver of topline growth in the GCC region. This is because Saudi Arabia, the GCC region’s largest Islamic insurance market, continues to benefit from higher economic growth. At the same time, authorities proceed with reducing the number of uninsured vehicles and have introduced new mandatory medical covers, leading to additional insurance demand and premium income,” the agency said in its report.

The Islamic insurance sector in the GCC region has expanded significantly over the past five years. Revenue growth was particularly strong during 2022-2023, when the sector increased by about 20 to 25 percent annually. This was mainly driven by the market in Saudi Arabia, which expanded by about 27 percent in 2022 and another 23 percent in 2023, the report stated.

 

 

 



Saudi Arabia, Italy Sign MoU to Strengthen Collaboration in Renewable Energy

The MoU focuses on key areas such as energy transitions and security, renewable energy and electricity interconnection. SPA
The MoU focuses on key areas such as energy transitions and security, renewable energy and electricity interconnection. SPA
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Saudi Arabia, Italy Sign MoU to Strengthen Collaboration in Renewable Energy

The MoU focuses on key areas such as energy transitions and security, renewable energy and electricity interconnection. SPA
The MoU focuses on key areas such as energy transitions and security, renewable energy and electricity interconnection. SPA

Saudi Minister of Energy Prince Abdulaziz bin Salman bin Abdulaziz has met in Riyadh with Italian Minister of Environment and Energy Security Gilberto Pichetto Fratin to explore avenues for cooperation across various energy sectors.

The two sides signed on Tuesday a memorandum of understanding (MoU) to strengthen collaboration between Saudi Arabia and Italy, serving their shared interests.

The MoU focuses on key areas such as energy transitions and security, renewable energy, electricity interconnection, energy efficiency, geothermal energy, methane emissions reduction, advancing energy storage solutions, petroleum, natural gas, and conventional and transitional fuels.

It also addresses enhancing the stability and reliability of petroleum and natural-gas markets, reducing market volatility, and improving energy supply security and supply chains.
The agreement highlights innovation and technology, such as hydrogen project development, climate-change mitigation solutions, the circular carbon economy, and carbon capture, utilization, and storage. Additionally, it emphasizes digital transformation, cybersecurity, and artificial intelligence in the energy sector while fostering joint initiatives to support engineering and construction projects in energy. These efforts align with the Paris Agreement and the 2030 Agenda for Sustainable Development.