Saudi health insurance sector to grow substantially, says Fitch

Health insurance in Saudi Arabia is expected to grow substantially in 2020 following the introduction of temporary insurance for overseas religious visitors, Fitch Ratings noted in a recent report.

The ratings agency expects the policies to account for over $800 million of premiums (about 8% of total insurance premiums) and cover around 17 million people annually.

Insurance coverage is mandatory for many types of visas, and these policies will be comprehensive, providing health coverage, including medical examinations and hospitalization, for the duration of pilgrims’ visits, Fitch report said.

Health premiums grew in 2019 following the Council of Cooperative Health Insurance’s revised schedule of benefits.

However, Fitch expects profitability to remain under pressure for Saudi health insurers. The loss ratio has risen significantly in 2018 and 2019 with premium increases not sufficient to offset the increasing medical claims inflation.

Health insurance is the dominant line of business in the Saudi market, accounting for over half of total Gross written premiums (GWP).

GWP for health insurance reached $5.3 billion in 2018 (2017: $5.1 billion), while total market GWP contracted, due to a 15% decrease in the motor insurance segment, the second largest line of business in the Kingdom.