Saudi Insurance Sector 2014
Insurance Sector
31 March 2015
Saudi Insurance Sector 2014 The report depicts the insurance sector`s performance in Saudi Arabia during the year 2014. The report also shows the main insurance indicators as gross premium written, net premium earned, claims incurred and net income for the sector and individual companies.
Per capita insurance expenditure in Saudi Arabia (Insurance density) increased 14% in 2014 hitting SAR 984, while gross written premiums as a ratio of GDP (Insurance Depth) concluded the year at 1.07% compared to 0.9% in 2013. In spite of the growth in per capita expenditure and gross written premiums, the key growth driver is mandatory insurance, which constituted more than 75% of the market. Nevertheless, protection and savings insurance is achieving the hieghst growth among all insurance activities, and it is expected that this type of insurance will maintain its growth momentum over the next five years.
Outlook for 2015 Insurance Index
Tadawul Index
150 140 130 120 110 100 90 80 70
Stability of the sector in terms of pricing as this factor put pressure on corporate profitability in the past.
The expected increase in interest rates in the second half of the year will support profitability.
Continuation of the sector's reliance on mandatory insurance.
Sources: Tadawul, companies filings and Albilad Capital Research
For more information you may contact: Turki Fadaak Research & Advisory Manager [email protected]
Insurance Sector Annual Evolution
Or Albilad Capital Head Office: Tel: Fax: P.O. Box: Riyadh
Gross Premium W ritten
+966 11 203 9892 +966 11 479 8453 140 11411
Net Premium Earned
35.0
50% 23%
45%
30.0
40%
18%
25.0 20.0
8%
10.0
5.0
18%
17%
15.0
12%
24.7
8.7
30% 25%
20% 21.8
20.9 14.5
12.4
11% 43% 30.3
27% 19%
18.8
35%
27%
11% SAR Billion
Our website: www.albilad-capital.com/en/research
Net Claims Incurred
15% 17.6
17.2 15.9
11.1
10% 5%
0.0
0% 2011
2012
2013
2014
1
Insurance Sector 31 March 2015
Sector Overview By the end of 2014, the number of insurance and reinsurance companies licensed in the Saudi market totaled 35 companies, 28 of them are qualified by the Cooperative Health Insurance Council to provide medical insurance services. General insurance includes seven sub-activities namely vehicles, marine, aviation, energy, engineering, insurance, accident and liability insurance, as well as insurance on property and against fire. The risks to insurance companies vary according to the risk of major insurance activities, competition and growth rates for each insurance activity. Medical insurance represented 52% of the insurance market at the end of 2014, and vehicle insurance accounted for 26.5%, so the medical insurance and vehicle insurance represented 78.5% of the size of the insurance market, while protection and savings insurance represented only 2.6%. The decrease in the share of protection and savings insurance in the total market compared to global markets is attributed to many factors including the fact that the market is still in its early stages, as well as a general lowing savings culture. In addition, religious considerations decrease the demand for traditional protection and saving, which pushed many insurance companies to start issuing Sharia-compliant products. The structure of the insurance market in Saudi Arabia is different from many of global markets, with many factors affecting each type of insurance. The next points represent the most important factors impacting the Saudi insurance sector:
Mandatory insurance represents the bulk of the market majority as legislations have been the main motivation for the growth of medical and vehicle insurance activities. It is noteworthy that Health Insurance Council issued at the end of last year a decision requiring the provision of medical insurance for all families of foreign residents working for the private sector, thus increasing the demand for medical insurance in 2015.
Low interest rates over the past year contributed to the decline in the yield on the investments of insurance companies.
Rising medical care costs and an exaggeration of some medical providers in their costs led to a decline in the profitability of insurance companies operating in the medical sector. In the same context, the Health Insurance Council is working on a draft of Saudi Health Insurance Bus (SHIB) Program which aims to electronically connect all parties involved in medical insurance as well as taking advantage of the best international practices in the field of medical insurance. We believe that the completion of this project will positively impact medical insurance companies as well as medical care providers.
Over the past year, medical insurance constituted 52% of the insurance market versus 26.5% for vehicle insurance as well as 22% for other activities.
Segment Market Share Breakdown - 2014
3%
8% 2%
7%
1% 52%
27%
Health
Vehicle
Marine
Engineer
Property
Other
Saving & Protection
2
Insurance Sector 31 March 2015
Sector Overview In 2014, the insurance market size in Saudi Arabia exceeded SAR 30 billion, with total written premiums* rising 22.8% to SAR 30.3 billion, compared to SAR 24.7 billion in 2013. The share of medical insurance increased 21 basis points up to 52% of total written premiums during the year as medical written premiums soared 23.3% coming in at SAR 15.7 billion. As for vehicles insurance, the share of written premiums ascended 138 basis points registering 26.5% of total written premiums as the amount of insurance premiums surged 29.5% to SAR 8.02 billion. Regarding protection and savings insurance, the total amount of written premiums increased 37.5% posting SAR 0.8 billion, and represented 2.64% of the total written premiums during the year. The shares of other insurance activities stabilized at 1.4% for marine insurance, 2.1% for engineering insurance, 7% for property insurance, and 8.4% in the case of incidents and responsibilities. The net written premiums* rose by 29% to SAR 24.1 billion by the end of 2014 due to growth in net written premiums of medical and vehicles insurances by 29.5% and 30.8%, respectively as well as a 24.7% increase in protection and savings insurance. Net written premiums for other types of insurance grew by 16% in the case of marine insurance, and 8% for engineering insurance, 0.23% for the incidents and responsibilities, while property insurance dropped 5.5%. The retention ratio* for the sector increased 381 basis points in 2014 coming in at 79.45% compared to 75.64% in 2013. This is due to the high retention of health insurance and insurance which captured 78% of total written premiums. The retention ratio for medical insurance hit 93% at the end of 2014 versus 95% for vehicle insurance, 34% for marine insurance rate, 30% for accidents and responsibilities, 21% in the case of engineering insurance , as well as 10% for property insurance. Net earned premiums* for all insurance companies shifted up 26% concluding the year at SAR 21.8 billion in 2014 compared to SAR 17.4 billion a year earlier. On the other hand, total paid claims paid rose by 26% to SAR 20.5 billion in 2014 compared to SAR 16.7 billion in 2013. Net claims incurred* for insurance companies amounted to SAR 17.6 billion in 2014 growing 11.2% over the previous year where the figure reached SAR 15.8 billion. The claims of medical insurance and vehicle insurance accounted for 60% and 36% of the total claims incurred during the year.
Retention Ratio per Segment - 2014 93%
95%
34%
30% 21%
10%
Health
Vehicle
Marine
Engineer
Property
Other
* Please refer to the definitions in page 11
3
Insurance Sector 31 March 2015
Financial Assessment By the end of 2014, written premiums amounted to SAR 30.3 billion increasing 22.8% compared to 2013 driven by the growth medical insurance premiums by 23.3% and vehicle insurance by 29.5%, raising the share of medical insurance and vehicle insurance slightly to 52% and 26.5% respectively of the total written premiums during the year. The overall retention rate rose to 79.45% compared to 75.64% in 2013. The claims ratio at the end of 2014 fell to 77% compared to 86% in 2013 with the decrease in the ratio stemming from the growth in written claims faster than the pace of net claims incurred. On the other side, the expenses ratio slumped from 23% in 2013 to 21% by the end of 2014. This decrease in the two ratios led to an improvement in the combined ratio * to 98% by the end of 2014, compared to 109% by the end of 2013, which means that the sector returned to record profitability from insurance operations. This is due largely to the registration of a slowdown in the growth of medical insurance claims reaching only 5.5% compared to the growth of the total claims by 11.2% for the same period. This also contributed to the decline in medical insurance share in total claims incurred to 59.5% compared to 62.7% at the end of 2013. Vehicle and medical insurance types accounted for 95% of the total claims incurred during the year. Consolidated profit of the insurers reached SAR 0.8 billion by the end of 2014 compared to a loss of SAR 1.3 billion in 2013. At the level of the assets of insurance operations, investments and cash at banks grew at a rate of 31% and 46%, respectively, to reach SAR 7.8 billion and SAR 6.1 billion. The two items represented together 41% of total assets of insurance operations. Receivables increased 7% by the end of 2014 to reach SAR 6.8 billion representing 20% of total assets. As for the assets of shareholders, investments escalated 5% to SAR 8.2 billion, however cash at banks tumbled 10% to SAR 2.5 billion. The combined ratio of the two items decreased to 87.6% compared to 89% at 2013. Total liabilities rose 16.4% to SAR 33.8 billion by the end of 2014 with insurance liabilities accounting for 74% of total liabilities versus 26% for shareholders’ liabilities and equity. Technical reserves mounted 17.5% coming in at SAR 28.3 billion representing 84% of the total insurance liabilities, which amounted to SAR 33.8 billion. On the other hand liabilities and shareholders' equity grew by 2.5% posting SAR 12.1 billion by the end of 2014.
Claims Incurred Ratio per Segment - 2014 2013
97%
94%
2014
98%
92%
79% 63%
71%
76%
53% 44% 34% 32%
Health
Vehicle
Marine
Engneering
Property
Other
40%
32%
Saving
4
Insurance Sector 31 March 2015
Market Structure
Total Market Share
2013
2014
Tawuniya
22.7%
20.5%
By the end of 2014, medical insurance accounted for 52% of total written premiums in the market 26.5% for vehicle insurance, accordingly the companies that holds a significant market share in the insurance market operates in at least one of the two activities. Among 35 insurance companies, only three companies seized a combined market shares of 54.1%, while the market shares of nine other companies ranged 2% to 5% totaling 27.1%. Furthermore, approximately 18.8% of the market is split among 23 insurers with individual market shares lower than 2%.
Bupa Arabia
12.9%
19.0%
MEDGULF
16.8%
14.6%
Malath Insuranc
3.1%
4.7%
UCA
5.2%
3.8%
AXA-Cooperative
3.1%
3.4%
AlRajhi Takaful
2.8%
3.1%
Trade Union
3.6%
2.7%
SAICO
2.5%
2.7%
Allianz SF
3.0%
2.4%
The biggest change that occurred in the market shares in 2014 was the increase of Bupa’s market share by 6.1%, while the market shares for Tawuniya and MEDGULF slipped 2.2% each.
Walaa Insurance
1.4%
2.1%
AICC
2.4%
2.1%
Saudi Re
1.7%
1.8%
Arabian Shield
1.4%
1.5%
Wataniya
2.0%
1.4%
Amana Insurance
0.3%
1.3%
Buruj
1.1%
1.3%
Gulf General
1.5%
1.2%
Gulf Union
1.6%
1.1%
Al Alamiya
1.3%
1.1%
SALAMA
0.9%
1.1%
ACIG
1.4%
1.0%
ATC
0.6%
0.8%
ACE
1.0%
0.8%
Sagr Insurance
1.1%
0.8%
Al-Ahlia
0.9%
0.8%
WAFA Insurance
0.8%
0.7%
SABB Takaful
0.7%
0.6%
Solidarity
0.8%
0.6%
SANAD
0.9%
0.4%
Alinma Tokio M
0.2%
0.3%
Enaya
0.2%
0.1%
Jazira Takaful
0.0%
0.1%
ANB Insurance
0.0%
0.0%
Weqaya Takaful
-
-
Taking into consideration the acquisition of medical insurance and vehicle insurance of a 78.5% combined market shares, we will Will shed more light on the two sectors
Market Share of Insurance Companies 2013
2014
22.7% 20.5% 19.0%
16.8% 14.6% 12.9%
4.7% 3.1%
5.2%
3.8%
3.1% 3.4%
2.8% 3.1%
3.6%
2.7%
2.5% 2.7%
3.0%
2.4%
1.4%
2.1%
2.4% 2.1%
1.7% 1.8%
5
Insurance Sector 31 March 2015
Market Structure
Health Insurance Market Share
2013
2014
Bupa Arabia
24.9%
36.4%
Health Insurance
Tawuniya
28.3%
26.4%
MEDGULF
23.6%
18.9%
By the end of 2014, total premiums for health insurance posted a 23.3% increase concluding the year at SAR 15.7 billion. Likewise, net written premium mounted 29.5% reaching SAR 14.6 billion and net earned premiums amounted to SAR 13.3 billion escalating 25.6%. As net written premiums grew at a higher than total written premiums, the retention ratio terminated the year at 93% compared to 88.6% at the end of 2013.
AXA-Cooperative
2.2%
2.3%
SAICO
2.0%
2.0%
Trade Union
2.0%
1.6%
AlRajhi Takaful
1.5%
1.2%
Arabian Shield
1.1%
1.1%
AICC
1.4%
1.1%
UCA
1.2%
1.1%
Net incurred claims for health insurers displayed a 5.5% increase to SAR 10.4 billion, thus the loss ratio slumped to 79% compared to 94% in 2013.
Amana Insurance
0.4%
0.9%
Gulf Union
1.2%
0.8%
WAFA Insurance
1.0%
0.8%
Sagr Insurance
1.4%
0.8%
ACIG
1.5%
0.8%
Buruj
0.7%
0.7%
Al-Ahlia
0.8%
0.7%
Malath Insuranc
1.7%
0.6%
Gulf General
0.8%
0.4%
Allianz SF
0.5%
0.4%
Solidarity
0.2%
0.3%
Walaa Insurance
0.3%
0.3%
SALAMA
0.2%
0.2%
Enaya
0.4%
0.2%
SANAD
0.7%
0.2%
Al Alamiya
0.2%
0.1%
-
0.0%
0.0%
0.0%
Jazira Takaful
-
-
SABB Takaful
-
-
ATC
-
-
Saudi Re
-
-
Weqaya Takaful
-
-
Wataniya
-
-
Alinma Tokio M
-
-
In the health insurance market, three companies captured 81.7% of the market in comparison with 10.3% for 7 other companies. The remaining 8% of the market was shared by 18 insurers with individual market shares less than 1%. The major development in the market included the increase in Bupa’s market share by 11%, while the share of Medgulf and Tawuniya tumbled 4.7% and 1.9%, respectively.
Health Insurance (SAR million)
2013
2014
Growth
Gross Written Premium
12,778
15,750
23%
Net Written Premium
11,317
14,659
30%
Net Earned Premium
10,553
13,259
26%
Net Incurred Claims
9,900
Retention Ratio
89%
Loss Ratio
94%
10,448
ANB Insurance ACE
6%
93% 79%
Health Insurance Market Share 2013
2014
36.4%
24.9%
28.3% 26.4% 23.6% 18.9%
2.2% 2.3%
2.0% 2.0%
2.0% 1.6%
1.5% 1.2%
1.1% 1.1%
1.4% 1.1%
1.2% 1.1%
0.4% 0.9%
1.2% 0.8%
1.0% 0.8%
6
Insurance Sector 31 March 2015
Market Structure
Vehicle Insurance Market Share
2013
2014
Malath Insuranc
7.0%
14.4%
Vehicle Insurance
Tawuniya
17.2%
13.0%
MEDGULF
6.4%
8.5%
In 2014, total written premiums for insurance on vehicles amounted to SAR 8 billion, growing 30% while net written premium increased 31% concluding the year at SAR 7.6 billion.
AlRajhi Takaful
7.1%
8.2%
UCA
10.9%
7.3%
AXA-Cooperative
5.1%
5.8%
Trade Union
8.0%
4.7%
AICC
4.3%
4.3%
SALAMA
2.8%
3.3%
Walaa Insurance
1.7%
3.0%
Amana Insurance
0.3%
3.0%
SAICO
2.0%
2.9%
Buruj
2.2%
2.7%
Arabian Shield
1.7%
2.5%
Wataniya
4.5%
2.2%
Allianz SF
2.5%
1.9%
Gulf General
2.1%
1.9%
ACIG
1.8%
1.6%
Al Alamiya
1.9%
1.6%
Solidarity
2.7%
1.4%
Al-Ahlia
1.4%
1.2%
Gulf Union
1.7%
0.9%
WAFA Insurance
0.9%
0.8%
SANAD
1.5%
0.8%
Sagr Insurance
0.5%
0.7%
ACE
0.9%
0.7%
Saudi Re
0.8%
0.3%
Alinma Tokio M
0.2%
0.3%
ANB Insurance
-
-
Jazira Takaful
-
-
SABB Takaful
-
-
ATC
-
-
Bupa Arabia
-
-
Weqaya Takaful
-
-
Enaya
-
-
Net earned premiums came in at SAR 6.8 billion showing growth of 28% versus 2013. The retention rate stabilized at 95% compared to 94% at the end of 2013. Net incurred claims for vehicle insurance posted 21% growth amounting to SAR 6.3 billion leading to the decline in the rate of loss of vehicle insurance to reach 92% compared to 97% in 2013. In the vehicles insurance market, seven companies captured 62% of the market size with market shares ranging between 5% to 14%, while 21 other insurers held 38% of the market, with market shares less than 4% each.
Vehicle Insurance (SAR million)
2013
2014
Growth
Gross Written Premium
6,198
8,026
30%
Net Written Premium
5,811
7,602
31%
Net Earned Premium
5,357
6,850
28%
Net Incurred Claims
5,169
Retention Ratio
6,277 95%
94%
Loss Ratio
21%
97%
92%
Vehicle Insurance Market Share 2013
2014
17.2% 14.4% 13.0% 10.9%
8.5% 7.0%
6.4%
8.2% 7.1%
8.0%
7.3% 5.1%
5.8% 4.7%
4.3% 4.3% 2.8% 3.3%
3.0%
3.0% 2.0%
1.7%
2.9%
2.2%
2.7%
0.3%
7
Insurance Sector 31 March 2015
Financial Indicators Company Tawuniya ANB Insurance Jazira Takaful Malath Insurance MEDGULF ALLIANZ SF SALAMA Walaa Insurance Arabian Shield SABB Takaful SANAD SAICO Wafa Gulf Union ATC Al-Ahlia ACIG AICC Trade Union Sagr Insurance UCA Saudi Re Bupa Arabia Weqayah Al Rajhi Takaful ACE AXA-Cooperative Gulf General Buruj Al Alamiya Solidarity Wataniya Amana Insurance Enaya Alinma Tokio M Total
Issued Shares Free Floating Net Income Shareholders Market Cap. 100.0 53.4 560.1 2,076 9,149 17.5 5.3 (43.7) 121 1,120 35.0 10.5 9.8 355 1,950 30.0 30.0 (13.7) 276 905 100.0 36.5 193.5 1,176 5,885 20.0 7.0 15.9 185 1,103 10.0 7.0 1.3 26 257 20.0 17.8 4.8 168 419 20.0 11.0 10.1 247 742 34.0 12.3 17.0 356 1,169 20.0 14.2 305 10.0 6.8 18.2 70 482 10.0 6.9 0.7 29 302 22.0 15.0 (8.0) 116 398 16.7 7.4 30.3 166 1,082 32.0 30.2 (53.1) 181 449 20.0 12.0 8.9 111 542 20.0 12.2 1.9 64 346 27.5 18.4 (14.3) 239 993 25.0 17.5 12.5 334 781 49.0 31.3 (80.3) 153 700 100.0 89.8 10.8 817 1,160 40.0 21.1 301.3 1,052 7,454 20.0 13.9 388 40.0 15.2 15.6 302 1,056 10.0 6.0 15.7 187 770 45.0 20.3 18.1 207 876 20.0 13.0 22.7 208 623 13.0 6.0 17.7 90 633 40.0 12.0 (28.1) 83 2,496 55.5 39.9 (62.4) 280 1,065 10.0 3.5 11.6 68 1,010 32.0 25.1 (73.7) 126 437 40.0 16.0 (45.2) 252 1,171 20.0 6.0 (29.4) 88 1,110 1124.2 650.3 846.6 10,208 49,324
Outstanding shares of insurance sector reached 1.12 billion shares making 2.3% of total outstanding shares in the Saudi Market.
12M EPS 5.60 (2.50) 0.28 (0.46) 1.94 0.80 0.13 0.24 0.51 0.50 1.82 0.07 (0.36) 1.82 (1.66) 0.45 0.10 (0.52) 0.50 (1.64) 0.11 7.53 0.39 1.57 0.40 1.14 1.36 (0.70) (1.12) 1.16 (2.30) (1.13) (1.47) 0.75
PE 16.33 N/A 199.37 N/A 30.41 69.43 205.20 86.49 73.50 68.72 26.45 431.29 N/A 35.77 N/A 60.67 181.15 N/A 62.29 N/A 107.01 24.74 67.80 49.01 48.52 27.47 35.85 N/A N/A 87.43 N/A N/A N/A 29.11
P/BV 4.40 9.27 5.49 3.27 5.00 5.97 9.71 2.48 3.00 3.28 6.88 10.41 3.43 6.53 2.47 4.90 5.44 4.15 2.33 4.56 1.41 7.08 3.49 4.11 4.22 2.99 7.03 30.14 3.81 14.81 3.45 4.65 12.55 4.83
Equity to 2.08 0.69 1.01 0.92 1.18 0.92 0.26 0.84 1.23 1.05 0.70 0.29 0.53 0.99 0.57 0.55 0.32 0.87 1.33 0.31 0.82 2.63 0.76 1.87 0.46 1.04 0.69 0.21 0.50 0.68 0.39 0.63 0.44 0.91
Company
Associate Bank
Ownership
ANB Insurance
Arab National Bank
Alinma Tokio M
Alinma Bank
Jazira Takaful
Aljazira Bank
Wataniya
Saudi Hollandi Bank
MEDGULF
Saudi Investment Bank
ALLIANZ SF
Banque Saudi Fransi
By the end of December 2014, the equity-to-capital ratio went above 1.00x for 11 companies where the equity-to-capital ratio reached 0.92x for the total sector.
SABB Takaful
Saudi British Bank
ATC
National Commercial Bank
Al Rajhi Takaful
Al Rajhi Bank
10 Saudi Banks are main shareholders in 10 insurance companies.
Al Alamiya
Riyad Bank
29.90% 28.75% 35.00% 20.00% 19.00% 32.50% 32.50% 30.00% 22.50% 30.00%
Market Cap.* reached SR 49.3 billion making 2.5% of total market cap. of Saudi Market. The sector’s aggregate net Income of 2014 amounted to SR 846.6 million with 12M EPS of SR 0.75.
LTM: Last Twelve Months Ending Q4 2014 Market Cap., PE and P/BV as of 30 March 2015
8
Insurance Sector 31 March 2015
Insurance Premiums Breakdown SAR MN Company Tawuniya
2013
GWP 2014
G
2013
NWP 2014
G
2013
NEP 2014
G
Net Incurred Claims 2013 2014 G
Retention Ratio Claims Ratio 2013 2014 2013 2014
5,605
6,208
%11
4641
5293
%14
4728
4,804
%2
4,883
3,757
)%23(
%83
%85
%103
%78
ANB Insurance
-
6
-
-
2
-
-
0
-
-
0
-
-
%28
-
%97
Jazira Takaful
-
30
-
-
18
-
-
6
-
-
3
-
-
%58
-
%44
771
1,413
%83
660
1266
%92
662
1,033
%56
559
927
%66
%86
%90
%84
%90
MEDGULF
4,138
4,416
%7
2892
3198
%11
2598
3,127
%20
2,631
2,622
)%0(
%70
%72
%101
%84
ALLIANZ SF
746
725
)%3(
403
398
)%1(
355
421
%19
233
317
%36
%54
%55
%66
%75
SALAMA
218
319
%46
203
299
%47
178
257
%44
180
219
%21
%93
%94
%101
%85
Walaa Insurance
347
650
%87
193
335
%73
152
257
%69
97
208
%114
%56
%52
%64
%81
Arabian Shield
333
453
%36
211
290
%37
211
273
%29
179
215
%20
%63
%64
%84
%79
SABB Takaful
183
193
%5
157
165
%5
238
226
)%5(
9
13
%47
%86
%85
%4
%6
SANAD
228
124
)%46(
179
73
)%59(
149
141
)%6(
123
100
)%19(
%79
%59
%82
%71
SAICO
624
804
%29
376
545
%45
353
462
%31
312
359
%15
%60
%68
%88
%78
Wafa
197
214
%9
122
141
%16
114
129
%13
85
81
)%4(
%62
%66
%74
%63
Gulf Union
388
342
)%12(
208
187
)%10(
199
207
%4
185
186
%1
%54
%55
%93
%90
ATC
140
252
%79
48
78
%62
31
79
%152
1
15
%1678
%34
%31
%3
%19
Al-Ahlia
219
238
%9
176
213
%21
138
229
%66
93
182
%95
%80
%89
%68
%80
ACIG
347
297
)%14(
235
229
)%2(
205
213
%4
136
149
%10
%68
%77
%66
%70
AICC
586
644
%10
378
443
%17
448
413
)%8(
462
325
)%30(
%64
%69
%103
%79
Trade Union
877
808
)%8(
651
563
)%14(
447
649
%45
391
570
%46
%74
%70
%88
%88
Sagr Insurance
263
240
)%9(
203
181
)%11(
271
162
)%40(
151
106
)%30(
%77
%75
%56
%65
1,293
1,165
)%10(
873
796
)%9(
867
782
)%10(
869
794
)%9(
%68
%68
%100
%101
Malath Insurance
UCA Saudi Re
420
556
%32
386
515
%33
290
491
%69
300
401
%34
%92
%93
%104
%82
3,177
5,740
%81
3098
5659
%83
2604
4,595
%76
2,094
3,649
%74
%97
%99
%80
%79
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Al Rajhi Takaful
690
945
%37
556
856
%54
506
712
%41
428
563
%32
%81
%91
%84
%79
ACE
249
248
)%1(
115
99
)%13(
116
94
)%19(
69
55
)%21(
%46
%40
%59
%58
AXA-Cooperative
776
1,040
%34
671
911
%36
644
851
%32
538
714
%33
%87
%88
%84
%84
Gulf General
370
367
)%1(
173
186
%7
165
190
%15
130
123
)%5(
%47
%51
%79
%65
Buruj
279
379
%36
199
325
%64
172
274
%59
118
198
%67
%71
%86
%69
%72
Al Alamiya
331
335
%1
160
172
%8
155
160
%3
135
141
%4
%48
%51
%87
%88
Solidarity
205
187
)%9(
145
135
)%7(
64
156
%144
125
151
%21
%71
%72
%195
%96
Wataniya
487
434
)%11(
248
166
)%33(
238
191
)%19(
229
149
)%35(
%51
%38
%96
%78
Amana Insurance
83
392
%370
55
275
%403
43
191
%342
31
213
%580
%66
%70
%73
%112
Enaya
50
33
)%34(
28
20
)%30(
12
30
%147
11
24
%130
%56
%60
%87
%81
Alinma Tokio M
51
92
%82
18
33
%82
9
33
%280
11
33
%213
%35
%35
%122
%100
24,671
30,289
%23
%26
15,799
17,562
%11
%76
%79
%90.99
%80.41
Bupa Arabia Weqayah
Sector
18,661.0 24,064.1
%29
17,362.48 21,840
GPW: Gross Written Premium NPW: Net Written Premium NPE: Net Earned Premium
* The figure is subjected to double count of reinsurance premiums accepted from other insurers or reinsurers.
9
Insurance Sector 31 March 2015
Retention Ratio Breakdown - 2014 SAR MN Company
Health
Vehicle
Marine
Engineering
Property
Others
Total
Tawuniya
99.0%
100.0%
-
-
13.6%
-
85.3%
ANB Insurance
98.3%
-
0.8%
0.4%
18.0%
28.5%
Jazira Takaful
-
-
-
-
-
-
58.5%
Malath Insurance
100.0%
100.0%
-
8.9%
4.8%
28.7%
89.6%
MEDGULF
85.0%
83.8%
-
-
-
12.6%
72.4%
ALLIANZ SF
44.1%
97.5%
-
9.8%
18.2%
23.0%
54.9%
SALAMA
98.3%
98.3%
-
-
-
18.6%
93.8%
Walaa Insurance
100.0%
99.4%
-
5.1%
4.0%
58.8%
51.6%
Arabian Shield
100.0%
53.6%
-
3.1%
17.8%
64.1%
SABB Takaful
-
-
-
-
-
-
85.4%
SANAD
26.1%
96.6%
18.2%
3.8%
-
23.7%
58.9%
SAICO
93.7%
97.6%
6.9%
3.3%
-
10.0%
67.8%
Wafa
58.4%
95.5%
-
-
65.9%
Gulf Union
93.5%
57.5%
13.4%
-
17.8%
54.6%
-
-
-
-
-
18.9%
-
31.1%
Al-Ahlia
97.7%
96.9%
-
9.1%
-
76.3%
89.5%
ACIG
77.8%
96.9%
-
-
-
19.2%
77.1%
AICC
52.4%
97.4%
28.3%
9.0%
-
10.0%
68.8%
Trade Union
56.5%
93.2%
-
-
69.6%
Sagr Insurance
91.4%
95.8%
-
4.7%
19.1%
75.3%
UCA
99.7%
99.4%
-
-
39.3%
-
11.7%
68.3%
-
98.4%
98.4%
84.1%
0.0%
336.6%
92.5%
98.6%
-
-
97.5%
99.1%
-
-
-
Al Rajhi Takaful
-
98.6%
-
-
17.9%
90.6%
ACE
60.8%
98.0%
-
22.3%
11.6%
41.9%
40.1%
AXA-Cooperative
98.8%
99.7%
51.0%
44.2%
13.4%
81.8%
87.6%
Gulf General
44.6%
85.6%
22.0%
15.1%
2.8%
50.3%
50.6%
Buruj
99.0%
97.4%
27.5%
-
6.6%
19.6%
85.7%
Al Alamiya
40.2%
98.3%
41.7%
6.1%
13.9%
41.4%
51.2%
Solidarity
61.4%
87.0%
-
7.2%
-
40.6%
72.4%
Wataniya
-
81.6%
10.9%
6.4%
3.3%
9.6%
38.3%
Amana Insurance
46.6%
86.9%
19.2%
7.5%
13.8%
83.1%
70.3%
Enaya
59.8%
-
-
-
-
-
59.8%
-
93.7%
9.1%
9.3%
-6.4%
31.1%
35.2%
93.1%
94.7%
33.7%
20.7%
10.3%
29.9%
79.4%
ATC
Saudi Re Bupa Arabia Weqayah
Alinma Tokio M Sector
-
10
Insurance Sector 31 March 2015
Definitions Gross Written Premium The total premiums on policies issued by an insurance company during a specific period of time regardless of what portions have been earned. Written premiums are the amount of premium charged for a policy that has already become effective.
Net Written Premium it is equal to gross written premium minus the amount the company allocated for reinsurance, as well as premium losses surplus.
Net Earned Premium The amount of total premiums collected by an insurance company over a period that have been earned based on the ratio of the time passed on the policies to their effective life and adjusted to reinsurance. This pro-rated amount of paid-in-advance premiums have been "earned" and now belong to the insurer. It can be calculated as net written premiums minus changes in net unearned premiums.
Incurred Claims An estimate of the amount of outstanding liabilities for a policy over a given valuation period. It includes all paid claims during the period plus a reasonable estimate of unpaid liabilities. It is calculated by adding paid claims and unpaid claims minus the estimate of unpaid claims at the end of the prior valuation period.
Retention Ratio Percentage of net premium written to gross premium written.
Claims Ratio: Claims incurred as a percentage of net premium earned plus reinsurance commissions and insurance income
Expense Ratio General and administration expense to gross written premiums.
Loss Ratio Claims incurred as a percentage of net earned premium.
Combined Ratio Sum of expense ratio and claims ratio
11
Insurance Sector 31 March 2015
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Investment Banking
E-mail: Tel:
E-mail: Tel:
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[email protected] +966-11-203-9830
Disclaimer AlBilad Capital exerted utmost efforts to ensure that the information included in this report is accurate and correct. However, AlBilad Capital, its managers, and staff bear no liability whether explicitly or implicitly for the content of the report and no legal responsibility, whether directly or indirectly, for any results based on it. This report should not be reproduced, redistributed, or sent directly or indirectly to any other party or published in full or in part for any purpose whatsoever without a prior written permission from AlBilad Capital. We would also like to note that this information in no way constitutes a recommendation to buy or sell banknotes or make any investment decisions. Any investment act taken by an investor based fully or partially on this report is the complete responsibility of the investor. This report is not meant to be used or seen as advice or an option or any other measure to be taken in the future. We recommend consulting a qualified investment advisor before investing in these investment tools. AlBilad Capital preserves all rights associated with this report.
12
31 March 2015
Saudi Insurance Sector 2014 The report depicts the insurance sector`s performance in Saudi Arabia during the year 2014. The report also shows the main insurance indicators as gross premium written, net premium earned, claims incurred and net income for the sector and individual companies.
Per capita insurance expenditure in Saudi Arabia (Insurance density) increased 14% in 2014 hitting SAR 984, while gross written premiums as a ratio of GDP (Insurance Depth) concluded the year at 1.07% compared to 0.9% in 2013. In spite of the growth in per capita expenditure and gross written premiums, the key growth driver is mandatory insurance, which constituted more than 75% of the market. Nevertheless, protection and savings insurance is achieving the hieghst growth among all insurance activities, and it is expected that this type of insurance will maintain its growth momentum over the next five years.
Outlook for 2015 Insurance Index
Tadawul Index
150 140 130 120 110 100 90 80 70
Stability of the sector in terms of pricing as this factor put pressure on corporate profitability in the past.
The expected increase in interest rates in the second half of the year will support profitability.
Continuation of the sector's reliance on mandatory insurance.
Sources: Tadawul, companies filings and Albilad Capital Research
For more information you may contact: Turki Fadaak Research & Advisory Manager [email protected]
Insurance Sector Annual Evolution
Or Albilad Capital Head Office: Tel: Fax: P.O. Box: Riyadh
Gross Premium W ritten
+966 11 203 9892 +966 11 479 8453 140 11411
Net Premium Earned
35.0
50% 23%
45%
30.0
40%
18%
25.0 20.0
8%
10.0
5.0
18%
17%
15.0
12%
24.7
8.7
30% 25%
20% 21.8
20.9 14.5
12.4
11% 43% 30.3
27% 19%
18.8
35%
27%
11% SAR Billion
Our website: www.albilad-capital.com/en/research
Net Claims Incurred
15% 17.6
17.2 15.9
11.1
10% 5%
0.0
0% 2011
2012
2013
2014
1
Insurance Sector 31 March 2015
Sector Overview By the end of 2014, the number of insurance and reinsurance companies licensed in the Saudi market totaled 35 companies, 28 of them are qualified by the Cooperative Health Insurance Council to provide medical insurance services. General insurance includes seven sub-activities namely vehicles, marine, aviation, energy, engineering, insurance, accident and liability insurance, as well as insurance on property and against fire. The risks to insurance companies vary according to the risk of major insurance activities, competition and growth rates for each insurance activity. Medical insurance represented 52% of the insurance market at the end of 2014, and vehicle insurance accounted for 26.5%, so the medical insurance and vehicle insurance represented 78.5% of the size of the insurance market, while protection and savings insurance represented only 2.6%. The decrease in the share of protection and savings insurance in the total market compared to global markets is attributed to many factors including the fact that the market is still in its early stages, as well as a general lowing savings culture. In addition, religious considerations decrease the demand for traditional protection and saving, which pushed many insurance companies to start issuing Sharia-compliant products. The structure of the insurance market in Saudi Arabia is different from many of global markets, with many factors affecting each type of insurance. The next points represent the most important factors impacting the Saudi insurance sector:
Mandatory insurance represents the bulk of the market majority as legislations have been the main motivation for the growth of medical and vehicle insurance activities. It is noteworthy that Health Insurance Council issued at the end of last year a decision requiring the provision of medical insurance for all families of foreign residents working for the private sector, thus increasing the demand for medical insurance in 2015.
Low interest rates over the past year contributed to the decline in the yield on the investments of insurance companies.
Rising medical care costs and an exaggeration of some medical providers in their costs led to a decline in the profitability of insurance companies operating in the medical sector. In the same context, the Health Insurance Council is working on a draft of Saudi Health Insurance Bus (SHIB) Program which aims to electronically connect all parties involved in medical insurance as well as taking advantage of the best international practices in the field of medical insurance. We believe that the completion of this project will positively impact medical insurance companies as well as medical care providers.
Over the past year, medical insurance constituted 52% of the insurance market versus 26.5% for vehicle insurance as well as 22% for other activities.
Segment Market Share Breakdown - 2014
3%
8% 2%
7%
1% 52%
27%
Health
Vehicle
Marine
Engineer
Property
Other
Saving & Protection
2
Insurance Sector 31 March 2015
Sector Overview In 2014, the insurance market size in Saudi Arabia exceeded SAR 30 billion, with total written premiums* rising 22.8% to SAR 30.3 billion, compared to SAR 24.7 billion in 2013. The share of medical insurance increased 21 basis points up to 52% of total written premiums during the year as medical written premiums soared 23.3% coming in at SAR 15.7 billion. As for vehicles insurance, the share of written premiums ascended 138 basis points registering 26.5% of total written premiums as the amount of insurance premiums surged 29.5% to SAR 8.02 billion. Regarding protection and savings insurance, the total amount of written premiums increased 37.5% posting SAR 0.8 billion, and represented 2.64% of the total written premiums during the year. The shares of other insurance activities stabilized at 1.4% for marine insurance, 2.1% for engineering insurance, 7% for property insurance, and 8.4% in the case of incidents and responsibilities. The net written premiums* rose by 29% to SAR 24.1 billion by the end of 2014 due to growth in net written premiums of medical and vehicles insurances by 29.5% and 30.8%, respectively as well as a 24.7% increase in protection and savings insurance. Net written premiums for other types of insurance grew by 16% in the case of marine insurance, and 8% for engineering insurance, 0.23% for the incidents and responsibilities, while property insurance dropped 5.5%. The retention ratio* for the sector increased 381 basis points in 2014 coming in at 79.45% compared to 75.64% in 2013. This is due to the high retention of health insurance and insurance which captured 78% of total written premiums. The retention ratio for medical insurance hit 93% at the end of 2014 versus 95% for vehicle insurance, 34% for marine insurance rate, 30% for accidents and responsibilities, 21% in the case of engineering insurance , as well as 10% for property insurance. Net earned premiums* for all insurance companies shifted up 26% concluding the year at SAR 21.8 billion in 2014 compared to SAR 17.4 billion a year earlier. On the other hand, total paid claims paid rose by 26% to SAR 20.5 billion in 2014 compared to SAR 16.7 billion in 2013. Net claims incurred* for insurance companies amounted to SAR 17.6 billion in 2014 growing 11.2% over the previous year where the figure reached SAR 15.8 billion. The claims of medical insurance and vehicle insurance accounted for 60% and 36% of the total claims incurred during the year.
Retention Ratio per Segment - 2014 93%
95%
34%
30% 21%
10%
Health
Vehicle
Marine
Engineer
Property
Other
* Please refer to the definitions in page 11
3
Insurance Sector 31 March 2015
Financial Assessment By the end of 2014, written premiums amounted to SAR 30.3 billion increasing 22.8% compared to 2013 driven by the growth medical insurance premiums by 23.3% and vehicle insurance by 29.5%, raising the share of medical insurance and vehicle insurance slightly to 52% and 26.5% respectively of the total written premiums during the year. The overall retention rate rose to 79.45% compared to 75.64% in 2013. The claims ratio at the end of 2014 fell to 77% compared to 86% in 2013 with the decrease in the ratio stemming from the growth in written claims faster than the pace of net claims incurred. On the other side, the expenses ratio slumped from 23% in 2013 to 21% by the end of 2014. This decrease in the two ratios led to an improvement in the combined ratio * to 98% by the end of 2014, compared to 109% by the end of 2013, which means that the sector returned to record profitability from insurance operations. This is due largely to the registration of a slowdown in the growth of medical insurance claims reaching only 5.5% compared to the growth of the total claims by 11.2% for the same period. This also contributed to the decline in medical insurance share in total claims incurred to 59.5% compared to 62.7% at the end of 2013. Vehicle and medical insurance types accounted for 95% of the total claims incurred during the year. Consolidated profit of the insurers reached SAR 0.8 billion by the end of 2014 compared to a loss of SAR 1.3 billion in 2013. At the level of the assets of insurance operations, investments and cash at banks grew at a rate of 31% and 46%, respectively, to reach SAR 7.8 billion and SAR 6.1 billion. The two items represented together 41% of total assets of insurance operations. Receivables increased 7% by the end of 2014 to reach SAR 6.8 billion representing 20% of total assets. As for the assets of shareholders, investments escalated 5% to SAR 8.2 billion, however cash at banks tumbled 10% to SAR 2.5 billion. The combined ratio of the two items decreased to 87.6% compared to 89% at 2013. Total liabilities rose 16.4% to SAR 33.8 billion by the end of 2014 with insurance liabilities accounting for 74% of total liabilities versus 26% for shareholders’ liabilities and equity. Technical reserves mounted 17.5% coming in at SAR 28.3 billion representing 84% of the total insurance liabilities, which amounted to SAR 33.8 billion. On the other hand liabilities and shareholders' equity grew by 2.5% posting SAR 12.1 billion by the end of 2014.
Claims Incurred Ratio per Segment - 2014 2013
97%
94%
2014
98%
92%
79% 63%
71%
76%
53% 44% 34% 32%
Health
Vehicle
Marine
Engneering
Property
Other
40%
32%
Saving
4
Insurance Sector 31 March 2015
Market Structure
Total Market Share
2013
2014
Tawuniya
22.7%
20.5%
By the end of 2014, medical insurance accounted for 52% of total written premiums in the market 26.5% for vehicle insurance, accordingly the companies that holds a significant market share in the insurance market operates in at least one of the two activities. Among 35 insurance companies, only three companies seized a combined market shares of 54.1%, while the market shares of nine other companies ranged 2% to 5% totaling 27.1%. Furthermore, approximately 18.8% of the market is split among 23 insurers with individual market shares lower than 2%.
Bupa Arabia
12.9%
19.0%
MEDGULF
16.8%
14.6%
Malath Insuranc
3.1%
4.7%
UCA
5.2%
3.8%
AXA-Cooperative
3.1%
3.4%
AlRajhi Takaful
2.8%
3.1%
Trade Union
3.6%
2.7%
SAICO
2.5%
2.7%
Allianz SF
3.0%
2.4%
The biggest change that occurred in the market shares in 2014 was the increase of Bupa’s market share by 6.1%, while the market shares for Tawuniya and MEDGULF slipped 2.2% each.
Walaa Insurance
1.4%
2.1%
AICC
2.4%
2.1%
Saudi Re
1.7%
1.8%
Arabian Shield
1.4%
1.5%
Wataniya
2.0%
1.4%
Amana Insurance
0.3%
1.3%
Buruj
1.1%
1.3%
Gulf General
1.5%
1.2%
Gulf Union
1.6%
1.1%
Al Alamiya
1.3%
1.1%
SALAMA
0.9%
1.1%
ACIG
1.4%
1.0%
ATC
0.6%
0.8%
ACE
1.0%
0.8%
Sagr Insurance
1.1%
0.8%
Al-Ahlia
0.9%
0.8%
WAFA Insurance
0.8%
0.7%
SABB Takaful
0.7%
0.6%
Solidarity
0.8%
0.6%
SANAD
0.9%
0.4%
Alinma Tokio M
0.2%
0.3%
Enaya
0.2%
0.1%
Jazira Takaful
0.0%
0.1%
ANB Insurance
0.0%
0.0%
Weqaya Takaful
-
-
Taking into consideration the acquisition of medical insurance and vehicle insurance of a 78.5% combined market shares, we will Will shed more light on the two sectors
Market Share of Insurance Companies 2013
2014
22.7% 20.5% 19.0%
16.8% 14.6% 12.9%
4.7% 3.1%
5.2%
3.8%
3.1% 3.4%
2.8% 3.1%
3.6%
2.7%
2.5% 2.7%
3.0%
2.4%
1.4%
2.1%
2.4% 2.1%
1.7% 1.8%
5
Insurance Sector 31 March 2015
Market Structure
Health Insurance Market Share
2013
2014
Bupa Arabia
24.9%
36.4%
Health Insurance
Tawuniya
28.3%
26.4%
MEDGULF
23.6%
18.9%
By the end of 2014, total premiums for health insurance posted a 23.3% increase concluding the year at SAR 15.7 billion. Likewise, net written premium mounted 29.5% reaching SAR 14.6 billion and net earned premiums amounted to SAR 13.3 billion escalating 25.6%. As net written premiums grew at a higher than total written premiums, the retention ratio terminated the year at 93% compared to 88.6% at the end of 2013.
AXA-Cooperative
2.2%
2.3%
SAICO
2.0%
2.0%
Trade Union
2.0%
1.6%
AlRajhi Takaful
1.5%
1.2%
Arabian Shield
1.1%
1.1%
AICC
1.4%
1.1%
UCA
1.2%
1.1%
Net incurred claims for health insurers displayed a 5.5% increase to SAR 10.4 billion, thus the loss ratio slumped to 79% compared to 94% in 2013.
Amana Insurance
0.4%
0.9%
Gulf Union
1.2%
0.8%
WAFA Insurance
1.0%
0.8%
Sagr Insurance
1.4%
0.8%
ACIG
1.5%
0.8%
Buruj
0.7%
0.7%
Al-Ahlia
0.8%
0.7%
Malath Insuranc
1.7%
0.6%
Gulf General
0.8%
0.4%
Allianz SF
0.5%
0.4%
Solidarity
0.2%
0.3%
Walaa Insurance
0.3%
0.3%
SALAMA
0.2%
0.2%
Enaya
0.4%
0.2%
SANAD
0.7%
0.2%
Al Alamiya
0.2%
0.1%
-
0.0%
0.0%
0.0%
Jazira Takaful
-
-
SABB Takaful
-
-
ATC
-
-
Saudi Re
-
-
Weqaya Takaful
-
-
Wataniya
-
-
Alinma Tokio M
-
-
In the health insurance market, three companies captured 81.7% of the market in comparison with 10.3% for 7 other companies. The remaining 8% of the market was shared by 18 insurers with individual market shares less than 1%. The major development in the market included the increase in Bupa’s market share by 11%, while the share of Medgulf and Tawuniya tumbled 4.7% and 1.9%, respectively.
Health Insurance (SAR million)
2013
2014
Growth
Gross Written Premium
12,778
15,750
23%
Net Written Premium
11,317
14,659
30%
Net Earned Premium
10,553
13,259
26%
Net Incurred Claims
9,900
Retention Ratio
89%
Loss Ratio
94%
10,448
ANB Insurance ACE
6%
93% 79%
Health Insurance Market Share 2013
2014
36.4%
24.9%
28.3% 26.4% 23.6% 18.9%
2.2% 2.3%
2.0% 2.0%
2.0% 1.6%
1.5% 1.2%
1.1% 1.1%
1.4% 1.1%
1.2% 1.1%
0.4% 0.9%
1.2% 0.8%
1.0% 0.8%
6
Insurance Sector 31 March 2015
Market Structure
Vehicle Insurance Market Share
2013
2014
Malath Insuranc
7.0%
14.4%
Vehicle Insurance
Tawuniya
17.2%
13.0%
MEDGULF
6.4%
8.5%
In 2014, total written premiums for insurance on vehicles amounted to SAR 8 billion, growing 30% while net written premium increased 31% concluding the year at SAR 7.6 billion.
AlRajhi Takaful
7.1%
8.2%
UCA
10.9%
7.3%
AXA-Cooperative
5.1%
5.8%
Trade Union
8.0%
4.7%
AICC
4.3%
4.3%
SALAMA
2.8%
3.3%
Walaa Insurance
1.7%
3.0%
Amana Insurance
0.3%
3.0%
SAICO
2.0%
2.9%
Buruj
2.2%
2.7%
Arabian Shield
1.7%
2.5%
Wataniya
4.5%
2.2%
Allianz SF
2.5%
1.9%
Gulf General
2.1%
1.9%
ACIG
1.8%
1.6%
Al Alamiya
1.9%
1.6%
Solidarity
2.7%
1.4%
Al-Ahlia
1.4%
1.2%
Gulf Union
1.7%
0.9%
WAFA Insurance
0.9%
0.8%
SANAD
1.5%
0.8%
Sagr Insurance
0.5%
0.7%
ACE
0.9%
0.7%
Saudi Re
0.8%
0.3%
Alinma Tokio M
0.2%
0.3%
ANB Insurance
-
-
Jazira Takaful
-
-
SABB Takaful
-
-
ATC
-
-
Bupa Arabia
-
-
Weqaya Takaful
-
-
Enaya
-
-
Net earned premiums came in at SAR 6.8 billion showing growth of 28% versus 2013. The retention rate stabilized at 95% compared to 94% at the end of 2013. Net incurred claims for vehicle insurance posted 21% growth amounting to SAR 6.3 billion leading to the decline in the rate of loss of vehicle insurance to reach 92% compared to 97% in 2013. In the vehicles insurance market, seven companies captured 62% of the market size with market shares ranging between 5% to 14%, while 21 other insurers held 38% of the market, with market shares less than 4% each.
Vehicle Insurance (SAR million)
2013
2014
Growth
Gross Written Premium
6,198
8,026
30%
Net Written Premium
5,811
7,602
31%
Net Earned Premium
5,357
6,850
28%
Net Incurred Claims
5,169
Retention Ratio
6,277 95%
94%
Loss Ratio
21%
97%
92%
Vehicle Insurance Market Share 2013
2014
17.2% 14.4% 13.0% 10.9%
8.5% 7.0%
6.4%
8.2% 7.1%
8.0%
7.3% 5.1%
5.8% 4.7%
4.3% 4.3% 2.8% 3.3%
3.0%
3.0% 2.0%
1.7%
2.9%
2.2%
2.7%
0.3%
7
Insurance Sector 31 March 2015
Financial Indicators Company Tawuniya ANB Insurance Jazira Takaful Malath Insurance MEDGULF ALLIANZ SF SALAMA Walaa Insurance Arabian Shield SABB Takaful SANAD SAICO Wafa Gulf Union ATC Al-Ahlia ACIG AICC Trade Union Sagr Insurance UCA Saudi Re Bupa Arabia Weqayah Al Rajhi Takaful ACE AXA-Cooperative Gulf General Buruj Al Alamiya Solidarity Wataniya Amana Insurance Enaya Alinma Tokio M Total
Issued Shares Free Floating Net Income Shareholders Market Cap. 100.0 53.4 560.1 2,076 9,149 17.5 5.3 (43.7) 121 1,120 35.0 10.5 9.8 355 1,950 30.0 30.0 (13.7) 276 905 100.0 36.5 193.5 1,176 5,885 20.0 7.0 15.9 185 1,103 10.0 7.0 1.3 26 257 20.0 17.8 4.8 168 419 20.0 11.0 10.1 247 742 34.0 12.3 17.0 356 1,169 20.0 14.2 305 10.0 6.8 18.2 70 482 10.0 6.9 0.7 29 302 22.0 15.0 (8.0) 116 398 16.7 7.4 30.3 166 1,082 32.0 30.2 (53.1) 181 449 20.0 12.0 8.9 111 542 20.0 12.2 1.9 64 346 27.5 18.4 (14.3) 239 993 25.0 17.5 12.5 334 781 49.0 31.3 (80.3) 153 700 100.0 89.8 10.8 817 1,160 40.0 21.1 301.3 1,052 7,454 20.0 13.9 388 40.0 15.2 15.6 302 1,056 10.0 6.0 15.7 187 770 45.0 20.3 18.1 207 876 20.0 13.0 22.7 208 623 13.0 6.0 17.7 90 633 40.0 12.0 (28.1) 83 2,496 55.5 39.9 (62.4) 280 1,065 10.0 3.5 11.6 68 1,010 32.0 25.1 (73.7) 126 437 40.0 16.0 (45.2) 252 1,171 20.0 6.0 (29.4) 88 1,110 1124.2 650.3 846.6 10,208 49,324
Outstanding shares of insurance sector reached 1.12 billion shares making 2.3% of total outstanding shares in the Saudi Market.
12M EPS 5.60 (2.50) 0.28 (0.46) 1.94 0.80 0.13 0.24 0.51 0.50 1.82 0.07 (0.36) 1.82 (1.66) 0.45 0.10 (0.52) 0.50 (1.64) 0.11 7.53 0.39 1.57 0.40 1.14 1.36 (0.70) (1.12) 1.16 (2.30) (1.13) (1.47) 0.75
PE 16.33 N/A 199.37 N/A 30.41 69.43 205.20 86.49 73.50 68.72 26.45 431.29 N/A 35.77 N/A 60.67 181.15 N/A 62.29 N/A 107.01 24.74 67.80 49.01 48.52 27.47 35.85 N/A N/A 87.43 N/A N/A N/A 29.11
P/BV 4.40 9.27 5.49 3.27 5.00 5.97 9.71 2.48 3.00 3.28 6.88 10.41 3.43 6.53 2.47 4.90 5.44 4.15 2.33 4.56 1.41 7.08 3.49 4.11 4.22 2.99 7.03 30.14 3.81 14.81 3.45 4.65 12.55 4.83
Equity to 2.08 0.69 1.01 0.92 1.18 0.92 0.26 0.84 1.23 1.05 0.70 0.29 0.53 0.99 0.57 0.55 0.32 0.87 1.33 0.31 0.82 2.63 0.76 1.87 0.46 1.04 0.69 0.21 0.50 0.68 0.39 0.63 0.44 0.91
Company
Associate Bank
Ownership
ANB Insurance
Arab National Bank
Alinma Tokio M
Alinma Bank
Jazira Takaful
Aljazira Bank
Wataniya
Saudi Hollandi Bank
MEDGULF
Saudi Investment Bank
ALLIANZ SF
Banque Saudi Fransi
By the end of December 2014, the equity-to-capital ratio went above 1.00x for 11 companies where the equity-to-capital ratio reached 0.92x for the total sector.
SABB Takaful
Saudi British Bank
ATC
National Commercial Bank
Al Rajhi Takaful
Al Rajhi Bank
10 Saudi Banks are main shareholders in 10 insurance companies.
Al Alamiya
Riyad Bank
29.90% 28.75% 35.00% 20.00% 19.00% 32.50% 32.50% 30.00% 22.50% 30.00%
Market Cap.* reached SR 49.3 billion making 2.5% of total market cap. of Saudi Market. The sector’s aggregate net Income of 2014 amounted to SR 846.6 million with 12M EPS of SR 0.75.
LTM: Last Twelve Months Ending Q4 2014 Market Cap., PE and P/BV as of 30 March 2015
8
Insurance Sector 31 March 2015
Insurance Premiums Breakdown SAR MN Company Tawuniya
2013
GWP 2014
G
2013
NWP 2014
G
2013
NEP 2014
G
Net Incurred Claims 2013 2014 G
Retention Ratio Claims Ratio 2013 2014 2013 2014
5,605
6,208
%11
4641
5293
%14
4728
4,804
%2
4,883
3,757
)%23(
%83
%85
%103
%78
ANB Insurance
-
6
-
-
2
-
-
0
-
-
0
-
-
%28
-
%97
Jazira Takaful
-
30
-
-
18
-
-
6
-
-
3
-
-
%58
-
%44
771
1,413
%83
660
1266
%92
662
1,033
%56
559
927
%66
%86
%90
%84
%90
MEDGULF
4,138
4,416
%7
2892
3198
%11
2598
3,127
%20
2,631
2,622
)%0(
%70
%72
%101
%84
ALLIANZ SF
746
725
)%3(
403
398
)%1(
355
421
%19
233
317
%36
%54
%55
%66
%75
SALAMA
218
319
%46
203
299
%47
178
257
%44
180
219
%21
%93
%94
%101
%85
Walaa Insurance
347
650
%87
193
335
%73
152
257
%69
97
208
%114
%56
%52
%64
%81
Arabian Shield
333
453
%36
211
290
%37
211
273
%29
179
215
%20
%63
%64
%84
%79
SABB Takaful
183
193
%5
157
165
%5
238
226
)%5(
9
13
%47
%86
%85
%4
%6
SANAD
228
124
)%46(
179
73
)%59(
149
141
)%6(
123
100
)%19(
%79
%59
%82
%71
SAICO
624
804
%29
376
545
%45
353
462
%31
312
359
%15
%60
%68
%88
%78
Wafa
197
214
%9
122
141
%16
114
129
%13
85
81
)%4(
%62
%66
%74
%63
Gulf Union
388
342
)%12(
208
187
)%10(
199
207
%4
185
186
%1
%54
%55
%93
%90
ATC
140
252
%79
48
78
%62
31
79
%152
1
15
%1678
%34
%31
%3
%19
Al-Ahlia
219
238
%9
176
213
%21
138
229
%66
93
182
%95
%80
%89
%68
%80
ACIG
347
297
)%14(
235
229
)%2(
205
213
%4
136
149
%10
%68
%77
%66
%70
AICC
586
644
%10
378
443
%17
448
413
)%8(
462
325
)%30(
%64
%69
%103
%79
Trade Union
877
808
)%8(
651
563
)%14(
447
649
%45
391
570
%46
%74
%70
%88
%88
Sagr Insurance
263
240
)%9(
203
181
)%11(
271
162
)%40(
151
106
)%30(
%77
%75
%56
%65
1,293
1,165
)%10(
873
796
)%9(
867
782
)%10(
869
794
)%9(
%68
%68
%100
%101
Malath Insurance
UCA Saudi Re
420
556
%32
386
515
%33
290
491
%69
300
401
%34
%92
%93
%104
%82
3,177
5,740
%81
3098
5659
%83
2604
4,595
%76
2,094
3,649
%74
%97
%99
%80
%79
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Al Rajhi Takaful
690
945
%37
556
856
%54
506
712
%41
428
563
%32
%81
%91
%84
%79
ACE
249
248
)%1(
115
99
)%13(
116
94
)%19(
69
55
)%21(
%46
%40
%59
%58
AXA-Cooperative
776
1,040
%34
671
911
%36
644
851
%32
538
714
%33
%87
%88
%84
%84
Gulf General
370
367
)%1(
173
186
%7
165
190
%15
130
123
)%5(
%47
%51
%79
%65
Buruj
279
379
%36
199
325
%64
172
274
%59
118
198
%67
%71
%86
%69
%72
Al Alamiya
331
335
%1
160
172
%8
155
160
%3
135
141
%4
%48
%51
%87
%88
Solidarity
205
187
)%9(
145
135
)%7(
64
156
%144
125
151
%21
%71
%72
%195
%96
Wataniya
487
434
)%11(
248
166
)%33(
238
191
)%19(
229
149
)%35(
%51
%38
%96
%78
Amana Insurance
83
392
%370
55
275
%403
43
191
%342
31
213
%580
%66
%70
%73
%112
Enaya
50
33
)%34(
28
20
)%30(
12
30
%147
11
24
%130
%56
%60
%87
%81
Alinma Tokio M
51
92
%82
18
33
%82
9
33
%280
11
33
%213
%35
%35
%122
%100
24,671
30,289
%23
%26
15,799
17,562
%11
%76
%79
%90.99
%80.41
Bupa Arabia Weqayah
Sector
18,661.0 24,064.1
%29
17,362.48 21,840
GPW: Gross Written Premium NPW: Net Written Premium NPE: Net Earned Premium
* The figure is subjected to double count of reinsurance premiums accepted from other insurers or reinsurers.
9
Insurance Sector 31 March 2015
Retention Ratio Breakdown - 2014 SAR MN Company
Health
Vehicle
Marine
Engineering
Property
Others
Total
Tawuniya
99.0%
100.0%
-
-
13.6%
-
85.3%
ANB Insurance
98.3%
-
0.8%
0.4%
18.0%
28.5%
Jazira Takaful
-
-
-
-
-
-
58.5%
Malath Insurance
100.0%
100.0%
-
8.9%
4.8%
28.7%
89.6%
MEDGULF
85.0%
83.8%
-
-
-
12.6%
72.4%
ALLIANZ SF
44.1%
97.5%
-
9.8%
18.2%
23.0%
54.9%
SALAMA
98.3%
98.3%
-
-
-
18.6%
93.8%
Walaa Insurance
100.0%
99.4%
-
5.1%
4.0%
58.8%
51.6%
Arabian Shield
100.0%
53.6%
-
3.1%
17.8%
64.1%
SABB Takaful
-
-
-
-
-
-
85.4%
SANAD
26.1%
96.6%
18.2%
3.8%
-
23.7%
58.9%
SAICO
93.7%
97.6%
6.9%
3.3%
-
10.0%
67.8%
Wafa
58.4%
95.5%
-
-
65.9%
Gulf Union
93.5%
57.5%
13.4%
-
17.8%
54.6%
-
-
-
-
-
18.9%
-
31.1%
Al-Ahlia
97.7%
96.9%
-
9.1%
-
76.3%
89.5%
ACIG
77.8%
96.9%
-
-
-
19.2%
77.1%
AICC
52.4%
97.4%
28.3%
9.0%
-
10.0%
68.8%
Trade Union
56.5%
93.2%
-
-
69.6%
Sagr Insurance
91.4%
95.8%
-
4.7%
19.1%
75.3%
UCA
99.7%
99.4%
-
-
39.3%
-
11.7%
68.3%
-
98.4%
98.4%
84.1%
0.0%
336.6%
92.5%
98.6%
-
-
97.5%
99.1%
-
-
-
Al Rajhi Takaful
-
98.6%
-
-
17.9%
90.6%
ACE
60.8%
98.0%
-
22.3%
11.6%
41.9%
40.1%
AXA-Cooperative
98.8%
99.7%
51.0%
44.2%
13.4%
81.8%
87.6%
Gulf General
44.6%
85.6%
22.0%
15.1%
2.8%
50.3%
50.6%
Buruj
99.0%
97.4%
27.5%
-
6.6%
19.6%
85.7%
Al Alamiya
40.2%
98.3%
41.7%
6.1%
13.9%
41.4%
51.2%
Solidarity
61.4%
87.0%
-
7.2%
-
40.6%
72.4%
Wataniya
-
81.6%
10.9%
6.4%
3.3%
9.6%
38.3%
Amana Insurance
46.6%
86.9%
19.2%
7.5%
13.8%
83.1%
70.3%
Enaya
59.8%
-
-
-
-
-
59.8%
-
93.7%
9.1%
9.3%
-6.4%
31.1%
35.2%
93.1%
94.7%
33.7%
20.7%
10.3%
29.9%
79.4%
ATC
Saudi Re Bupa Arabia Weqayah
Alinma Tokio M Sector
-
10
Insurance Sector 31 March 2015
Definitions Gross Written Premium The total premiums on policies issued by an insurance company during a specific period of time regardless of what portions have been earned. Written premiums are the amount of premium charged for a policy that has already become effective.
Net Written Premium it is equal to gross written premium minus the amount the company allocated for reinsurance, as well as premium losses surplus.
Net Earned Premium The amount of total premiums collected by an insurance company over a period that have been earned based on the ratio of the time passed on the policies to their effective life and adjusted to reinsurance. This pro-rated amount of paid-in-advance premiums have been "earned" and now belong to the insurer. It can be calculated as net written premiums minus changes in net unearned premiums.
Incurred Claims An estimate of the amount of outstanding liabilities for a policy over a given valuation period. It includes all paid claims during the period plus a reasonable estimate of unpaid liabilities. It is calculated by adding paid claims and unpaid claims minus the estimate of unpaid claims at the end of the prior valuation period.
Retention Ratio Percentage of net premium written to gross premium written.
Claims Ratio: Claims incurred as a percentage of net premium earned plus reinsurance commissions and insurance income
Expense Ratio General and administration expense to gross written premiums.
Loss Ratio Claims incurred as a percentage of net earned premium.
Combined Ratio Sum of expense ratio and claims ratio
11
Insurance Sector 31 March 2015
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