Gulf report - Making its mark.

(From Reinsurance)

By Isobel McCalman.

Whenever there is any discussion about the potential of the insurance sector in the Gulf, Saudi Arabia is held up as an example of the massive possibilities in the region. Up to now the country has shared the low level of insurance growth that is typical of the area. Social and religious factors combine with a general lack of awareness among the customer base.

The business case has been further inhibited by a lack of regulation and too many players.

These factors combine to produce some of the lowest premium as a percentage of GDP in the region. However, recent developments make it likely that this position will be developing dramatically. The Saudi Arabian Monetary Agency (SAMA) has said that co-operative health insurance and third-party liability insurance will become compulsory. This will apply to 15.56 million Saudi citizens and the 5.24 million non-Saudis who live and work in the country.

Interest generator

This potentially huge development is understandably generating much interest among both local and global insurance companies but the details are still vague. There are no dates for the roll-out of the law and the much anticipated presentation at the Middle East insurance conference - The new insurance law and its expected impact on the development of the market - by Ali Al Ghaith, director of insurance, banking and leasing at SAMA, was cancelled.