The Saudi Cabinet, chaired by Crown Prince Mohammed bin Salman, approved on Tuesday the establishment of the Insurance Authority. This move aims to foster robust and competitive insurance entities within the Kingdom.
Finance Minister Mohammed Al-Jadaan characterized this measure as pivotal within the developmental blueprint of the financial sector, a component of the Vision 2030 program designed to elevate the role of the insurance sector.
This initiative seeks to amplify its contribution to the economy, enhance job creation, and stimulate investment.
At the close of the previous year, Al-Jadaan revealed plans for the imminent establishment of an independent regulatory body for insurance. He emphasized the necessity for robust entities within the sector, capable of expanding both within and beyond the borders of the kingdom.
During that time, the minister declared his endorsement of merger activities among insurance companies within the sector.
He stressed the sector’s need for large entities and corporations that can meet Saudi Arabia’s aspirations in delivering innovative services.
The Governor of the Saudi Central Bank (SAMA), Ayman Al-Sayari, said setting up the insurance authority will boost the efficiency of the insurance sector and increase its contribution to the Kingdom's non-oil GDP.
The new independent entity will also help develop the insurance industry and create well-established insurance institutions capable of growth and competition to enhance the whole industry as well as the Kingdom’s economy.
In addition, the insurance authority will work to develop the insurance sector by providing the appropriate environment and ensuring that the interests of beneficiaries and policyholders are not affected, the governor added.
Experts, on their part, view the Cabinet’s decision as heralding a new qualitative phase for the insurance sector, one that aligns with ambitious objectives of a key pillar within the Financial Sector Development Program, an integral component of the Vision 2030 achievement.
Legal expert Fahad Al-Anzi told Asharq Al-Awsat that the presence of a unified regulatory body for insurance enhances sector performance, elevates the quality of insurance services, and safeguards the rights of policyholders.
Al-Anzi further emphasized that the establishment of this body will address the challenges facing the insurance market in the kingdom, guided by a unified vision and strategy set forth by the new entity. This approach ensures the integration of legislative, administrative, and financial solutions.
