Saudi insurance sector capable of creating jobs for citizens: SAMA official

Abdullah Al-Tuwaijri, director general of insurance supervision at SAMA

The rate of Saudization in the insurance sector reached 75% compared to 35-40% in the past, Abdullah Al-Tuwaijri, director general of insurance supervision at Saudi Central Bank (SAMA), said.

During a session at the Economic Growth Forum, held on March 23, Al-Tuwaijri said that the high Saudization rate indicates that the sector is capable to creating more job opportunities for citizens.

He attributed the delay in the growth of insurance companies to their relatively low capital in the beginning, compared to the size of the local economy.

Al-Tuwaijri also praised the recent mergers in the sector, as they will create stronger entities, help the sector grow faster, and achieve financial sustainability.

He explained that the regulatory developments such as product controls, product committee and actuarial controls aimed to enable innovation, protection of consumers and establishment of stronger entities.

"Whenever there is proper planning, the insurance sector will be able to cover large risks for a period of 10 years," the official said.

Commenting on the impacts of COVID-19 pandemic, Al-Tuwaijri said the central bank held meetings with the relevant authorities to ensure that the sector is able to continue its operations and the services offered to beneficiaries are not affected.

He added that the claims rose significantly in Q3 2020 compared to the previous quarter, and the controls exercised by SAMA in terms of precautionary measures helped the companies with technical provisions.

The insurance sector proved its ability with business continuity and providing all services electronically, he noted.

The financial impact from the precautionary measures for technical provisions helped companies to overcome the severest stage of the crisis, and SAMA is still continuing with technical provisions to help the insurance sector achieve sustainability.

Commenting on the impact of development projects on the sector, Al-Tuwaijri said the giant projects will bolster the Kingdom's economy and demand for insurance products.

He added that the major projects show the necessity of creating insurance entities able to keep pace with the growth in the Kingdom, noting that the sector is one of the drivers of

economic growth and the central bank seeks to create strong financial entities to meet such demand.

The protection and savings insurance plans represent 3% of the premiums, which is a very low percentage, Al-Tuwaijri said, noting that the regulations help the insurance companies to innovate new products for beneficiaries