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: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
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Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)

The global mining industry requires $6 trillion in investments over the next decade to meet rising demand, presenting a major challenge for the sector. This figure was revealed by Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef during an international meeting of mining ministers.

The announcement underscores the mining sector’s appetite for investments, coinciding with Saudi Arabia’s increasing focus on making mining the third pillar of its national industrial strategy.

The meeting was part of the Future Minerals Forum hosted by Saudi Arabia under the theme “Creating Impact,” which gathered representatives from nearly 90 countries and over 50 organizations. The conference highlighted the vital role of mining in Saudi Arabia and the global economy.

Key topics discussed included boosting value addition in mineral-producing countries and developing green metals using advanced technologies and renewable energy.

The ministerial meeting facilitated the signing of several memorandums of understanding aimed at strengthening international partnerships and advancing Saudi Arabia’s mining and minerals sector.

In 2022, Saudi Arabia increased its estimated untapped mineral wealth from $1.3 trillion to $2.5 trillion, a move intended to support the Kingdom’s efforts to diversify its economy.

Global mining investments

In his opening remarks, Al-Khorayef stated that the global mining industry would need investments of $6 trillion over the next decade to meet growing demand, particularly driven by the global energy transition. He emphasized that metals are the foundation of supply chains and are essential for meeting the increasing demand for critical materials.

The minister also stressed the importance of continuing three initiatives launched at last year’s conference, namely, the International Framework for Critical Minerals, a network of centers of excellence to build mining expertise in the Middle East, and a priority-based approach to supply chain development.

He proposed forming a ministerial-level steering committee to oversee these initiatives and called on multilateral organizations to develop a roadmap to mitigate investment risks and enhance collaboration.

In remarks to Asharq Al-Awsat on the sidelines of the conference, Al-Khorayef said that Saudi Arabia is working closely with Arab countries, particularly those with established mining sectors like Morocco, Jordan and Egypt.

The minister highlighted the need for regional integration in mining, as companies often operate across multiple areas, stressing that mining is a key component of Saudi Vision 2030, particularly as the world shifts toward sustainable energy solutions and technologies that require large quantities of minerals.

Yonis Ali Guedi, Djibouti’s Minister of Energy and Natural Resources told Asharq Al-Awsat that his country had signed a new cooperation agreement with Saudi Arabia to enhance collaboration in the mining sector and exchange training expertise. The agreement also includes resource-sharing and highlights Djibouti’s need for Saudi investments, he added.

The minister underlined the significant role Saudi companies could play in developing Djibouti’s mining sector, while also acknowledging progress in local industries. On a broader level, Guedi pointed to the growth of Africa’s mining sector and underscored the importance of maintaining this momentum to meet global demand.

Focus on critical minerals

In comments to Asharq Al-Awsat, Julius Maada Bio, Sierra Leone’s Minister of Mines and Mineral Resources, said that financing remains the greatest challenge for his country’s mining sector.

Exploration of critical minerals, he explained, requires significant investments with high risks, a challenge faced by many African nations. Bio underscored the importance of improving Sierra Leone’s infrastructure and value chain capabilities, from exploration to processing, and expressed interest in leveraging Saudi expertise in mining.

He added that Sierra Leone is seeking to strengthen international cooperation to create a comprehensive framework for critical minerals, with a focus on sustainability.

Malaysia’s Minister of Natural Resources, Environment, and Climate Change Nik Nazmi Nik Ahmad highlighted that the key challenge for his country’s mining sector is its technological gap. He noted that advanced technologies for producing and processing rare earth minerals are concentrated in a few major countries, limiting Malaysia’s competitiveness in global markets.

The minister also pointed to geopolitical tensions disrupting global supply chains, which has complicated matters for countries like Malaysia that rely on trade with both China and the United States.

Despite these challenges, Ahmad stated that his country is working to boost its domestic processing capabilities for rare earth minerals, aiming to reduce its reliance on raw material exports.

Yemeni Minister of Minerals Dr. Saeed Al-Shamasi emphasized Yemen’s valuable mineral resources, including lithium, which is essential for batteries and renewable energy technologies. Yemen also holds reserves of copper and other strategic minerals.

He called for urgent foreign investments to develop the sector, given Yemen’s lack of advanced infrastructure. Al-Shamasi also highlighted Yemen’s efforts to strengthen cooperation with Saudi Arabia, noting the establishment of a Saudi-Yemeni Business Council to facilitate investment across various sectors.

International agreements

During the ministerial meeting, Al-Khorayef signed cooperation agreements with six countries: Djibouti, the United Kingdom, Jordan, Zambia, Austria and France. These agreements aim to strengthen international partnerships and advance the Kingdom’s mining sector.

The accompanying exhibition featured cutting-edge technologies and innovations in mining, promoting global collaboration to achieve sustainability in the sector.

Meanhwile, two global alliances, including local and international companies, won exploration licenses for six mining sites in Saudi Arabia during the seventh round of mining competitions, according to the Ministry’s statement on Tuesday.