JEDDAH: Takaful is the fastest growing segment of the insurance industry in Saudi Arabia, RNCOS research and analytical consultancy said in its latest industry report. "We have found that Saudi Arabia has emerged as the largest market for Takaful insurance followed by Malaysia. Takaful insurance is growing at an annual growth rate of 15-20 percent globally, but it will grow at faster rate in Saudi Arabia because premium paid by the insured people is considered as donation and not premium," it said. The report noted tht protection and savings and health insurance are the fastest growing insurance lines in Saudi Arabia, with health insurance accounted for around 50 percent of the overall insurance market at the end of 2009. The health insurance sector is expected to grow at fast pace on the back of increasing involvement of private companies and the obligation for foreign nationals and foreign pilgrims to buy insurance covers. In addition, the most recent introduction of compulsory health insurance for private employees, irrespective of the size of the company they are working with, will further boost the health insurance market in the Kingdom. The general insurance category has also shown substantial growth despite the financial crisis, the report further said, forecasting that it will grow at a compound annual growth rate (CAGR) of more than 24 percent between 2010 and 2012 owing to rising motor and energy insurance. Property and aviation insurance are expected to emerge as the fastest growing general insurance segments over the forecast period. The motor insurance segment is projected to grow at a CAGR of 30 percent between 2010 and 2012. The fast growth rate will be achieved on the back of promotional strategies deployed by government. With the strong prospective growth in auto sales, the premium of motor insurance will increase as vehicle insurance has been made compulsory in the country. SAMA data showed that in 2009, insurance penetration of total GDP increased to 1.06 percent, up from 0.62 percent in 2008, representing a 69.9 percent increase. This significant increase in insurance penetration of total GDP is driven by the high increase in the insurance business volume on one hand and a decrease in total GDP on the other. Total net written premiums increased from SR7.321 billion ($1.95 billion) in 2008 to SR10.073 billion ($2.69 billion), a 37.6 percent increase. In 2009, the number insurance companies with more than SR100 million ($26.67 million) in shareholders' equity increased to 20, compared to nine companies in 2008. The largest company by total equity is Tawuniya, with total equity of SR1.4 billion ($373 million) following an increase from SR1.2 billion ($320 million) in 2008.
