Insurance stocks rise after the approval of the national strategy for the sector
Shares of insurance companies listed on the Saudi Stock Exchange (Tadawul) rose collectively today, albeit by varying percentages, in an immediate positive reaction following the Cabinet's approval yesterday of the National Insurance Strategy. This ambitious strategy aims to achieve key objectives, including strengthening insurance protection for individuals and businesses, developing a sustainable and efficient insurance market, and enabling and providing insurance coverage for national risks.
Performance of leading stocks and companies
Trading activity in the sector was brisk, with shares of Al-Taawuniyah, Bupa Arabia, Al Rajhi Takaful, and MedGulf leading the gainers, all reaching the daily limit of 10%. This surge reflects investor confidence in the sector's future and the ability of major companies to capitalize on the new opportunities the strategy will provide.
Pillars of the National Strategy
For its part, the Insurance Authority affirmed its commitment to working with partners and stakeholders to achieve its strategic objectives, based on several key pillars and enablers. The plan includes 11 strategic and enabling programs linked to these objectives, and 72 high-quality initiatives, all of which will contribute to fulfilling nine strategic promises aligned with the goals of Saudi Vision 2030.
The programs cover vital areas including health insurance, vehicle insurance, property and casualty insurance for individuals and businesses, and protection and savings insurance. The strategy also places significant emphasis on developing reinsurance to increase the retention rate of premiums within the Kingdom, address uninsured risks, modernize regulations and legislation, promote the use of technology, data, and artificial intelligence, and develop national human capital in this field.
Vision Context and Development of the Financial Sector
This step comes as a culmination of the Kingdom’s efforts to restructure the financial sector as part of the Financial Sector Development Program, one of the programs of Saudi Vision 2030. The state paved the way for this strategy by establishing the “Insurance Authority” as an independent and unified regulatory body, with the aim of ending the previous fragmentation of regulatory supervision, and ensuring a stable legislative environment that attracts foreign and local investments.
Economic importance and expected impact
This strategy is expected to significantly boost the insurance sector's contribution to non-oil GDP, which currently falls below global benchmarks, thus opening up substantial growth potential. It will also play a pivotal role in enhancing the financial stability of businesses and individuals through "protection and savings" products, which the strategy aims to raise awareness of and increase subscription rates for. Regionally, the Kingdom aims to transform the Saudi market into a leading regional hub for the insurance industry by developing its reinsurance and financial technology (InsurTech) sectors, thereby strengthening the national economy and creating thousands of specialized job opportunities for Saudi nationals.
