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Saudi Arabia: insurance Pilgrim to drive growth in the health sector

Saudi Arabia: insurance Pilgrim to drive growth in the health sector

Health insurance in the Kingdom of Saudi Arabia is expected to continue growing in 2020 after the introduction of temporary insurance for pilgrims from abroad, Fitch says.

"We expect this growth to be significant. These policies will be comprehensive and will provide health coverage, including medical examinations and hospitalization, during the period of pilgrims' stay in the Kingdom of Saudi Arabia," said the international credit rating agency.

"The documents are expected to represent more than 3 billion Saudi riyals ($ 800 million) in premiums (about 8% of total insurance premiums) and cover about 17 million people annually," Fitch said.

Health is the largest insurance sector in the Kingdom of Saudi Arabia. Health insurance premiums grew in 2019 after adjusting the cooperative health insurance board's benefit schedules that raised prices.

Engine recovery is expected.

Fitch also believes that auto premiums will rebound in the medium term as the application of uninsured vehicles is expected to improve. The government seeks to reduce uninsured vehicles to 25% of the total number of vehicles from 55% in the next two years. Premiums should also gradually increase after the decision to allow women to drive from 2018, as well as car sales. In 2018 and 2019, insurance premiums decreased as a result of a 25% decrease in average premiums, primarily due to unclaimed discounts. This decrease was partially offset by an increase in the number of insured vehicles.

The health and auto insurance sectors together represent more than 80% of the total premiums written in the Saudi market.