New regulations to facilitate growth in KSA insurance sector

The insurance sector in the Kingdom of Saudi Arabia (KSA) will find new opportunities for growth through the National Transformation Plan 2020 and Vision 2030 while simultaneously balancing business and profitability challenges, according to professional services organization EY. At the recent EY Jeddah Insurance Seminar held by the MENA insurance practice, EY experts discussed the opportunities and challenges facing the KSA insurance sector, along with the upcoming regulatory changes. Key executives and board members of leading KSA insurers based in Jeddah attended the event.
Ahmed Reda, Office Managing Partner, EY, Jeddah, said: “EY has been holding seminars across the country with key decision-makers and clients to encourage debate, the sharing of strategies, experiences and insights that will benefit the overall development of the KSA insurance market. The new regulations that are being introduced may cause some initial challenges in the insurance sector upon implementation, but we expect to also see some real opportunities develop as more companies adjust their financial practices to uphold international and local standards.”
Sanjay Jain, EY MENA Insurance Leader, added: “The KSA insurance market is going through a structural evolution with the introduction of stronger regulations, aided by a welcome shift towards the right level of technical pricing. The long-term rapid urbanization, growth in the middle class, and the use of mobile technologies could potentially lead to an overall faster growth for insurers. The enforcement of regulations to eradicate fraud, corruption and other abuses will also be critical for the increased growth of this sector.”
Omar Odeh, Director, EY Jeddah, and Adeel Mushtaq, Director, EY, discussed the financial reporting implications of the new IFRS regulations on KSA insurers, which are expected to affect both the assets and liabilities of their balance sheets. 
The latest trends and innovations in the global insurance market space and their relevance to the KSA insurance markets were discussed by Jonathan Matchett, Director, MENA Insurance Advisory, EY. Given the challenging technical results of the KSA insurance industry because of fragmentation and price competition, technology and operational transformation are imperative rather than a ‘good to have’. Jonathan further highlighted global and regional case studies around product differentiation, customer centricity, claims management, and process efficiency enabled by robotics, digital, telematics and analytics.

Source: Arab News