Saudi Insurance Sector Report - 1Q 2017

Transcription

1. August 17 , 2017 | Sector Reports Saudi Insurance Sector Q1 2017 The report depicts the performance of insurance sector in Saudi Arabia during the first-quarter of 2017. The report shows the main insurance indicators as gross premium written, net premium earned, claims incurred and net income for each of the sector and individual companies. Research Scope: The report includes all the data of the listed insurance companies in the Saudi Stock Market that are licensed to issue insurance polices in any insurance activity, except: 1. Saudi Reinsurance Company: The company is excluded as its activity is not consistent with the remaining listed insurance companies as the company operates in reinsurance activity only. Thus, the number of companies under coverage in this report totaled 32 companies out of 33 listed companies. Executive Summary  The gross written premiums of the Saudi insurance sector fell by 2.5% YoY in Q1 2017, largely due to slowdown in the economic activity.  Gross written premiums came in at SAR 11 billion (USD 2.94 billion) in Q1 2017.  Insurance assets registered growth of 6.4% YoY, coming in at SAR 56.9 billion (USD 15.2 billion). Investment grew 8.9% versus 19% in Q1 2016.  The insurance penetration stood at 3% in Q1 2017, meanwhile insurance density per capita shrank 4.98% or SAR 17 to SAR 339 (USD 90).  The retention ratio progressed to 86.6% in Q1 2017, which reflects less reliance on reinsurance market, meantime, the claims ratio surged to 81.1%. Content Overview 2 Insurance Structure 3 Insurance Sector Performance 4 Market Profitability 7 Health Insurance 8 General Insurance 10 Vehicle Insurance 11 Protection & Savings Insurance 13 Consolidated Financial Statements 14 Concentration of Insurance Segments 15 Financial Indicators 16 Appendixes 17 Source: Insurance Companies filings, SAMA, Tadawul, Albilad Capital.  Compulsory insurance lines - health and vehicle insurance - continues to dominate the insurance sector, together capturing 86% of the market’s total premiums.  Consolidated profit of the insurance sector grew by 2.8% coming in at SAR 315 million in Q1 2017 compared with SAR 306 million in Q1 2016.  There is still wide disparity in the individual performance of insurance companies, with only three companies captured 49% of the total insurance market. CCHI, and Insurance Sector Evolution with Growth Rates (SAR million) Gross Premiums Written Net Premiums Written 10 .2% 12,000 For more information, please contact: Turki Fadaak Research & Advisory Manager tfadaak@albilad-capital.com 6,000 4,000 Abdulrahman S. Aljarboua, MSF Financial Analyst aaljarboua@albilad-capital.com 1 -2.5 % 25 .7% 10,000 8,000 Net Claims Incurred 30 .4% 26 .4% 16 .1% 33.8 % 15 .7% 38 .7% 24.9 % 9 .2% 13.8 % 3.0 % 2.1% 14.1% 2,000 0 albilad-capital.com/Research
2. August 17 , 2017 | Sector Reports Saudi Insurance Sector Overview During the last years, the insurance sector flourished with the support of improvement in the regulatory environment and enforcement of the compulsory insurance, as a result of the population growth, increasing number of workers in the private sector, and higher number of vehicles, along with mounting awareness of the insurance’s importance. Looking at the future, we expect that the government's direction to strengthen the non-oil sector will provide growth opportunities for the insurance sector as a whole. The Ministry of Health is expected to turn hundreds of government-owned hospitals and thousands of primary health care centers into better-run corporations. This could significantly increase the number of accredited care providers within the insurance network. In addition, we expect hospitals to start charging insurance companies of at-fault motorists for the medical costs of their road accident victims, which aimed to reduce the burden of vehicle accidents on the government's health budget. The additional burden of loss, as well as loss adjustment expenses could push up vehicle insurance premiums even higher than current levels. Furthermore, the Saudi Arabian Monetary Authority (SAMA) is expected to fasten insurance companies with the Traffic Police Department through electronic terminals, to ensure enforcement of compulsory insurance on all vehicles and force motorists of illegally uninsured vehicles to buy insurance coverage. It is estimated that some 55% of the vehicles on the country's roads are uninsured, therefore, this step would increase the number of insurance policies. Contribution of the insurance sector to non-oil GDP remains low The insurance penetration, which refers to the contribution of the insurance sector to non-oil GDP, came in at 3.0% in Q1 2017. Meanwhile, the ratio of the total insurance assets to non-oil GDP sector reached 15.5% during the same period. This percentage still remains relatively weak, reflecting the small size of the sector compared with the banking sector, which has assets of 602% over the non-oil GDP sector. On the other hand, the insurance density rate — average insurance spending per capita — slipped 4.98% or SAR 17 to SAR 339 (USD 90) per capita in Q1 2017 from SAR 356 (USD 95) per capita in Q1 2016. Overall, the penetration and density rates of Saudi insurance are still relatively low compared with the mature insurance markets, which means that the insurance sector is still in the process of growth and offer future opportunities that are unexploited yet. Insurance spending per capita (SAR) Insurance sector penetration to non-oil GDP 3.1% 3.0% 2.8% 221 1.9% Insurance Penetration Breakdown Veh icle Insurance Density Breakdown (SAR) Gen eral Insurance Protection & Savin g 1.5 % 1.4% 1.2% 1.1% 0 .9 % 0 .4% 0 .0 % 0 .7% 0 .4% 0 .1% 0 .5 % 0 .1% 0 .4% 0 .1% Health Veh icle 400 1.4% 1.2% 0 .9 % 0 .6 % 339 280 2.3% Health 356 334 0 .4% 0 .1% 7.8 350 6 .7 300 250 4.8 200 46 .5 150 100 50 Gen eral Insurance 5 1.1 8 1.5 5 3.9 110 .3 Protection & Savin g 8 .0 43.0 7.8 40 .1 134.4 127.2 170 .8 16 3.1 6 6 .9 10 2.9 140 .1 16 1.5 0 2 albilad-capital.com/Research
3. August 17 , 2017 | Sector Reports Saudi Insurance Sector Insurance Structure The Saudi Insurance consists of three business lines: health insurance, protection & savings insurance, and general insurance that includes seven activities, namely: vehicle, marine, aviation, energy, engineering, accidents & responsibilities, and property & fire insurance. Health insurance continues to dominate the insurance sector The health Insurance maintained its position as the largest insurance segment in the Saudi market, with a market share of 48.2% in terms of gross premiums in Q1 2017, followed by the vehicle insurance(1) which held 37.6%, then the general insurance with 11.9%. The protection and savings insurance accounted for only 2.3% of the total market premiums. Due to the low awareness of insurance in the region, the two compulsory insurance lines of health and vehicle insurance together accounted for 86% of the market total premiums, leaving just 14% for the other segments. This clearly indicates that the insurance sector needs to adopt policies that help to improve competition and lead in practice to premium increases on other lines of business. Overcrowding exacerbates imbalances The insurance sector is still characterized by a high degree of concentration, as s result of an overcrowded market by too many insurance companies. The slowdown in insurance business activities clearly shows the continued disparity between the market leaders and the rest. Bupa Arabia, Tawuniya, and AlRajhi Takaful, the top three insurance companies in Saudi Arabia, enjoyed a combined market share of 49% in Q1 2017. The ten largest companies by premiums seized 78% of total premiums during the same period. Therefore, the insurance market will need to implement initiatives intended to support consolidation among companies. If insurers head toward a merger, their greater size will help dilute the impact of high costs and expenses, which subsequently would likely help promote greater competition across the whole market. Service providers The Saudi insurance sector has 33 listed insurers in the Saudi Stock Market, which operate at least in one of the three major insurance lines. Moreover, all Saudi listed insurers operate under the Takaful system or Islamic cooperative insurance scheme. In general, there are twenty-seven companies that offer health insurance services. Twentyeight companies provide general insurance, while eleven companies offer protection and savings insurance. In addition, there are about 217 professional companies that support the insurance services. (1) Vehicle Insurance was excluded from General Insurance due to its size. Insurance Market Share Q1 2016 Q1 2017 1 Bupa Arabia 21.6% 20.4% 2 Tawuniya 15.0% 18.3% 3 AlRajhi Takaful 4.7% 10.0% 4 MEDGULF 10.9% 7.1% 5 AXA Cooperative 4.0% 6.5% 6 Malath Insuranc 10.5% 4.1% 7 SAICO 3.0% 3.4% 8 Walaa 2.3% 2.7% 9 Allianz SF 1.4% 2.7% 10 Wataniya 1.9% 2.4% 11 Arabian Shield 2.4% 2.2% 12 WAFA Insurance 1.8% 2.1% 13 Trade Union 2.7% 2.1% 14 Salama 1.3% 2.1% 15 Buruj 1.1% 1.6% 16 Gulf Union 0.7% 1.5% 17 ATC 1.0% 1.1% 18 AICC 1.2% 1.0% 19 UCA 3.1% 1.0% 20 Alinma Tokio M 1.4% 0.9% 21 METLIFE AIG ANB 0.5% 0.9% 22 Sagr Insurance 0.6% 0.8% 23 Al Alamiya 1.0% 0.8% 24 CHUBB 0.7% 0.8% 25 ACIG 1.3% 0.7% 26 Gulf General 1.0% 0.7% 27 Enaya 0.3% 0.4% 28 SABB Takaful 0.4% 0.4% 29 Al-Ahlia 0.5% 0.4% 30 Solidarity 0.9% 0.3% 31 Amana Insurance 0.6% 0.2% 32 Jazira Takaful 0.1% 0.1% Insurance Market Share - Q1 2017 H e alth 48 .2% P ro te ction & Savin g En g in eering M arin e 2.3% 0 .9 % 0 .7% Ve h icle P ro p erty Oth e rs 31.9 % 5 .0 % 5 .3% General Insurance 3 albilad-capital.com/Research
4. August 17 , 2017 | Sector Reports Saudi Insurance Sector Insurance Sector Performance The Saudi insurance sector has witnessed a reduction in gross written premiums by 2.5% YoY in Q1 2017, hitting SAR 11 billion (USD 2.94bn) across all lines compared with SAR 11.3 billion (USD 3.01bn) in Q1 2017. The decline in premiums was mainly influenced by:  Slowdown in insurable activities due to slowdown in economic activity.  Increasing selectiveness in writing risky business by some insurance companies, to mitigate their risk of underwriting losses.  Tariff increases over the past years after the introduction of actuarial pricing guidelines. By line of business, the health insurance fell 1.9% YoY to SAR 5.3 billion in Q1 2017, which represented 48.2% of the market. The general insurance plummeted to SAR 1.3 billion, down 4.1% YoY. The vehicle insurance dropped to SAR 4.1 billion, down 2.8% from the same period in 2016. In contrast, the protection & savings insurance grew slightly by 0.5% reaching SAR 254 million. High volume of claims raises the insurance risk The insurance sector registered a 2.1% YoY increase in net claims incurred, posting SAR 5.8 billion (USD 1.55bn) in Q1 2017 compared with SAR 5.6 billion (USD 1.52bn) in Q1 2017. This was offset by a 1% downturn in net earned premiums. Broadly, all lines of insurance business saw claims increase, which may affect the ability of insurance companies to take risks and obligations. Moreover, the claims on both health insurance and vehicle insurance captured 64% and 34% of net claims incurred, respectively . This rate reflects the needs of the sector for diversification and expansion of other insurance products and business lines to mitigate insuranc e risk and increase its contribution to GDP. Gross Premium Written Breakdown (SAR million) Health Veh icle Gen eral Insurance 12,0 00 239 10,0 00 8,00 0 6,00 0 4,00 0 2,00 0 0 19 5 141 1,35 7 1,9 5 4 3,0 0 3 1,6 5 8 1,49 3 Health Protection & Savin g 25 3 25 4 7,00 0 1,36 4 1,30 7 6,00 0 4,26 7 4,0 8 9 4,9 6 8 4,148 4,00 0 5 ,319 Gen eral Insurance Protection & Savin g 40 29 3,00 0 5 ,423 Veh icle 5,00 0 2,38 0 2,00 0 29 889 1,00 0 1,9 36 45 72 68 1,36 6 1,75 2 3,134 2,5 20 48 48 72 78 1,8 9 5 1,9 5 9 3,6 75 3,726 0 Gross Premium Written Net Premium Written (SAR million) Net Premium Earned (SAR million) Net Claims Incurred (SAR million) Retention Ratio (SAR million) Growth Q1 2016 Q1 2017 Growth Q1 2016 Q1 2017 Growth Q1 2016 Q1 2017 Growth Health 5,423 5,319 (1.9%) 5,292 5,191 (1.9%) 4,586 4,406 (3.9%) 3,675 3,726 1.4% 97.6% 97.6% 80.1% 84.5% 48.0% 48.2% Vehicle 4,267 4,148 (2.8%) 3,444 3,841 11.5% 2,347 2,494 6.2% 1,895 1,959 3.4% 80.7% 92.6% 80.7% 78.6% 37.7% 37.6% General Insurance 1,364 1,307 (4.1%) 325 295 (9.0%) 279 247 (11.5%) 72 78 9.5% 23.8% 22.6% 25.7% 31.8% 12.1% 11.9% 253 254 0.5% 121 127 4.8% 117 108 (8.1%) 48 48 0.3% 9,181 9,454 3.0% 7,329 7,255 (1.0%) 5,689 5,811 2.1% Total 11,306 11,028 (2.5%) - Q1 2017 - Q1 2016 Q1 2017 Market Share Q1 2017 Protection & Savings Q1 2016 Loss Ratio Q1 2016 Segment 4 3,39 3 Net Claims Incurred Breakdown (SAR million) Q1 2016 Q1 2017 40.7% 44.4% 2.2% 2.3% 82.0% 86.6% 77.6% 80.1% 100% 100% albilad-capital.com/Research
5. August 17 , 2017 | Sector Reports Saudi Insurance Sector Retention rate reflects less reliance on reinsurance market Retained risk in the Saudi insurance sector remains absolutely dominated by the two compulsory lines of health and vehicle insurance. In Q1 2017, the retention ratio was about 22.6%, excluding health and vehicle. With these lines included, the ratio jumps to 86.6%. This high figure indicates that insurers carry alone most of the market risk, which affects their capacity and puts further pressure on the provided service to the customer. New regulations affect profitability The loss ratio refers to the carried losses by an insurance company in the form of claims. The overall claims of the insuranc e sector grew negatively 2.5% to 80.1% in Q1 2017 compared with 77.6% in the previous-year period. This was largely due to the significant growth in claims rate on both health and general insurance, offset by a decline in net earned premiums during the same period. On the other hand, the expenses ratio rose slightly over Q1 2017, to 13.9%. Moreover, when we look at the sector’s first -quarter results, we see a surprising number of insurers still suffering from some operational and administrative matters, despite they were established a long time ago. Many of the issues appear to be company-specific: excessive expenses and costs, undifferentiated products and services, or insufficient margins on highly competitive commodity lines of business; leading to large losses in their profits. Moreover, we expect that operating expenses to pick up in the short-term, as insurance companies will need to hire more expertise and improve their systems to meet the new regulatory demands, such as Saudization of technical and leadership positions. We believe that smaller companies will find the new regulations particularly challenging, while larger insurers should be able to cope with the additional demands. Retention Ratio Retention Ratio Breakdown 8 6 .6 % Health 8 2.0 % 73.9 % 9 3% 9 5 % 8 9 % 8 7% 79 .0 % Combined ratio of loss and expenses Loss ratio 98% 98% 85% 8 1% 9 3% Health Expenses ratio 8 2% 100 .0% 14.8% 80.0 % 14.6% 13.3% 77% 8 4% 84.8% 24% 20 % 23% 82.3% 77.6% Veh icle 9 4% Gen eral Insurance 8 4% 9 1% 80% Protection & Savin g 85% 8 1% 79 % 13.9% 60.0 % 16.9% 19 % Claims Ratio Breakdown 120 .0% 20.0 % 95% General Insurance 74.8 % 20 % 40.0 % Vehicle 80.1% 25 % 16 % 40 % 37% 42% 29 % 41% 26 % 44% 32% 37.1% 0.0% 5 albilad-capital.com/Research
6. August 17 , 2017 | Sector Reports Saudi Insurance Sector Balance sheet overview Insurance companies unveiled a growth in assets, but at lower pace. Total assets surged 6% in Q1 2017 compared with 12% in the last-year period to SAR 56.9 billion. In terms of investments, which accounts for 56.6% of total assets, insurers held most of their investments in the form of cash at banks. In Q1 2017, investment expanded 8.9% compared with 19% in the previous-year period to SAR 32 billion, of which 12.3% were related to cash on hand, 20.8% time deposits, 25.3% investment available-for-sale, and 41.5% to other assets such as investment property and investment in associates. Meanwhile, reinsurers' share of unearned premiums, which represented 7% of the total insurance operations' assets, tumbled 23%. Shrinkage in share capital outpaced by drop in premiums Share capital declined 9.6%, while premiums fell just 2.5%, signaling some strain on the insurance market's capital adequacy. In our opinion, the slowdown in premium and growth in reserves point to a potential weakening of insurers' risk-based capital positions. Total shareholder equity came in at SAR 13.5 billion in Q1 2017 compared with SAR 11.9 billion in the previous-year period, making an increase of 13.1% YoY. However, of the 32 listed insurers, only two witnessed an increase in their capital base, offset by 9 companies together losing SAR 993 million of their capital share. Growing technical reserves increases the durability and resistance of the sector to insurance risk The insurance sector recorded an increase in the technical reserves by 2.9% YoY, to reach SAR 31.3 billion in Q1 2017. These reserves represent a full 76% of the total liabilities and 126% of net claims incurred. The growth in net technical reserves is notable, as is the catch-up growth in shareholders' funds since 2014, which has been largely funded by rights issues. Likewise, the statutory reserves formed 86% of the total shareholders' liabilities and 18% of the share capital, which reflects the existence of adequate provisions for insurance companies against losses. Investments Breakdown (SAR million) Aggregate Total Assets - Breakdown (SAR million) Investment s Reinsurers' share Receivables 50,0 00 5,723 40,0 00 30,0 00 4,506 5,813 5,917 20,0 00 10,0 00 5,967 7,895 7,049 9,357 8,316 24,832 19,712 16,976 6,042 9,068 8,843 6,859 30,000 9,088 25,000 8,766 Time deposits 29,627 32,268 10,000 5,000 0 Cash on hand 5,135 1,989 3,886 5,593 5,508 2,835 3,541 6,698 6,637 3,489 5,666 3,977 6,725 7,942 8,159 12,952 13,407 7,443 8,765 Technical Reserves growth (SAR million) Profitability (SAR million) Net Income 3,066 20,000 15,000 0 Investment Inc ome Insurance o peratin g i ncome 35,0 00 30,0 00 400 30 6 300 315 25,0 00 18 2 200 110 92 82 100 21 14 10 0 6 Investment available-for-sale 35,000 60,0 00 -100 Other investment Other assets -6 7 -5 9 -18 6 3 46 20,0 00 15,0 00 50 10,0 00 5,00 0 0 albilad-capital.com/Research
7. August 17 , 2017 | Sector Reports Saudi Insurance Sector Market Profitability In aggregate, the insurers in Saudi market have witnessed growth of 2.8% YoY in their net profits, totaling SAR 315 million in Q1 2017 compared with SAR 306 million in Q1 2016. This was mainly driven by operating earnings, as a result of an improvement in pricing environment and a reduction in underwriting on activities priced below its value that had existed during last years. Moreover, the first-quarter results showed improved profit margins, due to lower reinsurance premiums, reduced policy acquisition costs, as well as higher income from investments. The return on assets expanded to 3.9% versus 2.2% in Q1 2016. Also, the return on equity rallied sharply to 15.8% compared with 9.9% in the same-period last-year. However, there is still a large disparity in individual performance of insurance companies, with Al Tawuniya (the largest company) generated 45% of the sector net profits. Across the sector as a whole, 26 insurers achieved a positive return on capital, while 6 insurers recorded negative returns. Likewise, the equity to capital ratio for 21 companies stood above 1, meanwhile 11 companies were less than 1 in the same ratio, implying that about one-third of insurance companies have been eroded part of their capital. Return on Capital - Q1 2017 Equity to Capital Ratio - Q1 2017 Taw uniya 66% Bup a Arabia 6 1% Arabian Sh ield 41% Buru j CHU BB Sag r Insurance AlRajhi Takaful 2.1x 2.0 x 1.6 x Buru j 1.4x ATC 1.3x SAICO 1.2x 23% Wal aa Wat ani ya 23% Allianz SF 1.1x UCA 22% AlRajhi Takaful 1.1x AXA Coop erative 1.1x 1.2x Gulf Union 18 % Solidarity 18 % Trad e Unio n 1.1x 1.1x WAFA Insurance 18 % Jazira Takaful ATC 18 % SABB Takaful Trad e Unio n 16 % WAFA Insurance 1.0 x Solidarity 1.0 x Gulf Union 1.0 x Salama 13% 1.1x Gulf General 11% Allianz SF 10 % Wat ani ya 1.0 x 10 % Alin ma Tokio M 1.0 x Al Alamiya Jazira Takaful 8% Gulf General Amana Insurance 7% AIC C AXA Coop erative 7% UCA 0 .9 x 1.0 x 0 .9 x ACI G 4% Al Alamiya 0 .9 x AIC C 3% MEDGULF 0 .9 x SABB Takaful 1% Amana Insurance 0 .8 x Alin ma Tokio M -4% Salama 0 .8 x MEDGULF -5 % Enaya 0 .8 x 0 .8 x METLIFE AI G ANB -7% Malath Insuran c Al-A hlia -9 % METLIFE AI G ANB 0 .7x Al-A hlia 0 .6 x ACI G 0 .6 x Enaya Malath Insuran c -125 % 7 37% Arabian Sh ield 28 % SAICO 2.3x Taw uniya 39 % 30 % 2.6 x CHU BB Sag r Insurance 34% Wal aa Bup a Arabia -12% albilad-capital.com/Research
8. August 17 , 2017 | Sector Reports Saudi Insurance Sector Health Insurance Health Insurance Market Share Q1 2016 Q1 2017 1 Bupa Arabia 45.1% 42.4% 2 Tawuniya 19.6% 27.2% 3 MEDGULF 16.3% 11.4% 4 SAICO 1.8% 2.2% 5 Arabian Shield 1.9% 2.2% 6 AlRajhi Takaful 1.7% 1.8% 7 AXA Cooperative 2.1% 1.5% 8 Sagr Insurance 0.8% 1.4% 9 METLIFE AIG ANB 0.6% 1.2% 10 WAFA Insurance 0.7% 1.2% 11 AICC 0.9% 0.9% 12 Enaya 0.6% 0.9% 13 Malath Insuranc 0.8% 0.9% 14 Buruj 0.9% 0.8% 15 Trade Union 1.1% 0.8% 16 Gulf Union 0.1% 0.5% 17 Salama 0.2% 0.5% Health providers 18 ACIG 0.8% 0.5% The number of accredited health care providers by the Health Insurance Council now sits at 4,468 providers in Q1 2017. Overall, the total number of accredited hospitals reached 277 hospitals, and the number of hospital beds available to insured reached 46,041 beds. Also, the number of doctors in all health care providers has risen to 43,085 doctor. 19 Solidarity 1.3% 0.5% 20 UCA 0.4% 0.4% 21 Allianz SF 0.3% 0.3% 22 Walaa 0.8% 0.3% 23 Gulf General 0.3% 0.2% 24 Al-Ahlia 0.2% 0.2% 25 Amana Insurance 0.68% 0.0% 26 Al Alamiya 0.002% 0.0% A contraction of the insurance policies has reflected on the insurance premiums The health insurance sector has registered a slight reduction in gross written premiums by 1.9% YoY, posting SAR 5.3 billion in Q1 2017. This drop coincided with the decline in the number of insurance policies to 507 thousand policy during the same period, compared with 731 thousand policy in Q1 2016, primarily as a result of the introduction of employer unified document for the private sector. Still, the health insurance captured 48.2% of the total market size. The retention ratio remained unchanged at 97.6%. Despite the low reliance on reinsurance markets by insurers in the first-quarter, net earned premiums slumped 3.9% to SAR 4.4 billion, due to technical reserves expansion. Meantime, net claims incurred inflated 1.4% YoY to SAR 3.7 billion. These factors contributed to rising 4.4% in the loss ratio to 84.5%. The largest companies continue to dominate the health insurance sector Health insurance sector consisted of 27 listed insurers. However, Bupa Arabia, Tawuniya and Medgulf have continued to dominate the sector, as they combined generated around 81% of the total market premiums. The other seven largest companies seized only 11.6% of the market share, leaving just 7.4% for the remaining 17 listed insurers. This clearly indicates that most insurers are unable to compete with larger peers in an overcrowded market. Furthermore, the Ministry of Health plans to turn government-owned hospitals and many primary health care centers into better-run corporations. The privatization of health care sector is expected to ramp up the number of accredited care providers inside the insurance network, but it is expected to ease pressure on the current private hospitals. Health Ins. Market Share Concentration - Q1 2017 Health Insurance (SAR million) Q1 2016 Q1 2017 Growth Gross Premium Written 5,423 5,319 (1.9%) Net Premium Written 5,292 5,191 (1.9%) Net Premium Earned 4,586 4,406 (3.9%) Net Claims Incurred 3,675 3,726 1.4% Retention Ratio 97.6% 97.6% 0.0% Claims Ratio 80.1% 84.5% 5.5% 8 18 17 7 Companies Companies 7.4% 11.6% 3 Companies 81.0% albilad-capital.com/Research
9. August 17 , 2017 | Sector Reports Saudi Insurance Sector A significant increase in the number of insured The number of insured in health insurance has risen to 11.3 million at the end of Q1 2017. But the number of Saudi nationals insured estimated to approach 2.03 million, representing 17.9% of the total insureds., while the number of foreign residents insured hit nearly 9.3 million, or 82.1% of the total insureds. Thus, only 35% of the population of Saudi Arabia are provided with health insurance benefits. In addition, estimates show that approximately 870,000 foreign workers are working in the private sector without being provided with health cover by their employers. Therefore, the Health Insurance Council has started to implement the fourth phase of the unified document scheme in April 2017, which seeks to prompt private employers to provide health coverage for all employees and their dependents. 9 albilad-capital.com/Research
10. August 17 , 2017 | Sector Reports Saudi Insurance Sector General Insurance The general insurance sector is considered the largest sector on an activities and products basis. Broadly, general insurance includes seven sub-activities, namely: vehicle, marine, aviation, energy, engineering, accidents & responsibilities, and property & fire insurance. Insurance Premiums The gross written premiums of General insurance(1) came in at SAR 1.3 billion in Q1 2017, down 4.1% YoY. This deterioration in premiums mainly stemmed from a 52.8% tumble in aviation segment, a 8.3% decrease in engineering segment, and a 8.1% drop in marine segment, which was largely attributed to a decline in the number of insurance policies. This was offset by marked improvement in energy segment by 159.1% and an increase of 3.6% in property segment. In addition, the sector showed further declines in margins. The loss ratio grew negatively to 31.8% compared with 25.7% in the last-year period. This was led by a 11.5% slump in net premiums earned to, SAR 247 million. While, net claims incurred expanded 9.5% YoY, to SAR 78 million. Despite the sector often suffers from overcapacity, it still continues to cede most of its commercial exposure to reinsurance companies. The retention ratio fell to 22.6% in Q1 2017 from 23.8% in the previous-year period. Market Structure The general insurance is characterized by a relatively medium concentration of companies. Tawuniya retains its position as the largest insurer in terms of gross premiums, followed by SAICO. These top 2 players together captured around 30% of the market, representing an increase of 3.9% in their shares compared with the last-year period. Meanwhile, 15 other insurers seized for 61% of total premiums. The remaining 11 insurers write only about 9% of the gross premiums in the market. (1) Vehicle insurance was excluded due to its size. Q1 2016 Q1 2017 Growth 1,364 1,307 (4.1%) Net Premium Written 325 295 (9.0%) Net Premium Earned 279 247 (11.5%) Net Claims Incurred 72 78 9.5% Retention Ratio 23.8% 22.6% (5.1%) Claims Ratio 25.7% 31.8% 23.7% 10 Q1 2016 Q1 2017 1 Tawuniya 15.2% 17.2% 2 SAICO 11.4% 12.9% 3 Wataniya 8.0% 8.4% 4 MEDGULF 8.2% 7.1% 5 UCA 4.5% 6.5% 6 Arabian Shield 5.4% 5.3% 7 Walaa 5.2% 4.6% 8 Allianz SF 3.3% 4.0% 9 AXA Cooperative 3.2% 3.9% 10 CHUBB 3.3% 3.7% 11 Gulf General 3.2% 2.9% 12 AlRajhi Takaful 3.0% 2.9% 13 Trade Union 4.2% 2.4% 14 Gulf Union 3.1% 2.3% 15 Alinma Tokio M 3.0% 2.3% 16 Al Alamiya 4.3% 2.3% 17 Malath Insuranc 2.3% 2.2% 18 AICC 2.4% 1.7% 19 WAFA Insurance 1.1% 1.6% 20 Buruj 1.0% 1.1% 21 Al-Ahlia 1.0% 0.9% 22 ACIG 0.7% 0.8% 23 METLIFE AIG ANB 0.6% 0.8% 24 Salama 0.5% 0.7% 25 SABB Takaful 0.5% 0.6% 26 Sagr Insurance 0.5% 0.5% 27 Solidarity 0.4% 0.3% 28 Amana Insurance 0.6% 0.2% Market Share Concentration - Q1 2017 General Insurance (SAR million) Gross Premium Written General Insurance Market Share 2 Co mp anies 11 30 % Co mp anies 9% 15 Co mp anies 6 1% albilad-capital.com/Research
11. August 17 , 2017 | Sector Reports Saudi Insurance Sector Vehicle Insurance The vehicle insurance is the largest segment of general insurance, and the second after the health insurance at the market level, accounting for about 37.6% of overall GWP. However, the sector has proven problematic on several levels, for example, the number of serious road accidents, which is expected to have reported 1.1 million accidents in 2016. Worse still, some 55% of the vehicles on the country's roads are uninsured. Insurance Premiums Vehicle Insurance Market Share Q1 2016 Q1 2017 1 AlRajhi Takaful 9.2% 23.2% 2 AXA Cooperative 6.6% 14.1% 3 Malath Insuranc 26.0% 9.0% 4 Tawuniya 10.1% 8.3% 5 Walaa 3.5% 5.4% 6 The vehicle insurance sector registered a shrinkage in overall gross written premiums, down 2.8% YoY, reaching SAR 4.1 billion in Q1 2017. This was primarily attributable to a marked contraction in the number of registered vehicles and a reduction in the number of insurance policies by 17,000 policies from the last-year period. Allianz SF 1.5% 4.8% 7 Salama 2.9% 4.7% 8 Trade Union 4.4% 3.8% 9 WAFA Insurance 3.5% 3.5% The decline in written premiums was offset by a growth in net earned premiums by 6.2% YoY to SAR 2.5 billion. On the other side, net claims incurred increased 3.4% YoY, but at a slower pace than the growth of earned premiums, which contributed positively to a decline in the loss ratio to 78.6% from 80.7% in the previous-year period. 10 Wataniya 2.3% 3.4% 11 Buruj 1.5% 2.9% 12 Gulf Union 0.8% 2.5% 13 SAICO 2.1% 2.1% 14 MEDGULF 5.6% 2.1% 15 Alinma Tokio M 2.7% 1.6% 16 Arabian Shield 2.2% 1.3% 17 Al Alamiya 1.2% 1.3% 18 ACIG 2.2% 1.1% 19 AICC 1.2% 1.0% 20 CHUBB 0.8% 0.9% 21 Gulf General 1.4% 0.8% 22 Al-Ahlia 0.7% 0.6% 23 Amana Insurance 0.6% 0.5% 24 METLIFE AIG ANB 0.2% 0.4% 25 Sagr Insurance 0.5% 0.4% 26 Solidarity 0.3% 0.2% 27 UCA 6.2% 0.1% Moderate Competition Despite the intense rivalry between the sector's 27 licensed insurers, the vehicle insurance sector is characterized by a medium degree of concentration. Al Rajhi Takafwul and AXA Cooperative, the top two companies in the segment seized 37% of the market. The two companies were able to increase its market shares significantly over their levels in Q1 2016, benefiting from the temporary suspension of some other insurance companies by SAMA. Furthermore, 12 other insurers captured 53% of total premiums, leaving only 10% for the remaining 13 insurers, with shares less than 2% for each company. Market Share Concentration - Q1 2017 Vehicle Insurance (SAR million) Q1 2016 Q1 2017 Growth Gross Premium Written 4,267 4,148 (2.8%) Net Premium Written 3,444 3,841 11.5% Net Premium Earned 2,347 2,494 6.2% Net Claims Incurred 1,895 1,959 3.4% Retention Ratio 80.7% 92.6% 14.7% Claims Ratio 80.7% 78.6% (2.7%) 11 13 Co mpanies 10 % 2 Co mpanies 37% 12 Co mpanies 5 3% albilad-capital.com/Research
12. August 17 , 2017 | Sector Reports Saudi Insurance Sector Vehicle Insurance Decline in auto sales in the Kingdom The Saudi market is considered one of the twenty largest auto market in the world and the largest among the Gulf markets. The number of vehicles on the country's roads totaled 14 million. However, initial estimates indicate that the number of new registered vehicles in 2017 is likely to be lower than in previous years. Overall, the passenger vehicles constitute the largest share of new vehicle sales in the Kingdom, with estimated sales of about 520,500 vehicles, while the estimates for sales of commercial vehicles to be around 112,900 vehicles in 2017. Notably, the number of registered vehicles represents the primary driver of demand for vehicle insurance. 12 albilad-capital.com/Research
13. August 17 , 2017 | Sector Reports Saudi Insurance Sector Protection & Savings Insurance The share of protection and savings insurance is the lowest among all other insurance segments, which represents just 2.3% of overall gross written premiums. Market Share Q1 2016 Q1 2017 1 ATC 46.1% 46.5% 2 SABB Takaful 15.3% 15.5% 3 Allianz SF 12.9% 12.8% 4 Wataniya 4.8% 6.0% 5 Jazira Takaful 4.9% 5.2% 6 METLIFE AIG ANB 2.7% 4.1% Insurance Premiums 7 AlRajhi Takaful 2.1% 3.9% The sector saw gross premiums written increase slightly by 0.5% YoY to SAR 254 million in Q1 2017. In spite of a reduction in the number of insurance policies by 3.1%, which may indicate an increase in pricing levels. 8 Alinma Tokio M 3.1% 2.5% 9 AXA Cooperative 4.6% 2.4% 10 Al Alamiya 0.0% 0.7% 11 Solidarity 3.5% 0.5% The low market share for the protection and savings insurance is attributed to several factors including, the modernity of the Saudi insurance sector, poor savings culture, in addition to religious considerations of many categories of the community towards the protection and savings products as illegal. On the other hand, the loss ratio grew to 44.4% compared with 40.7% in the previous-year period, owing to the dip in premiums earned. Net claims incurred stabilized at SAR 48 million. While, net premiums earned slumped 8.1% to SAR 108 million. Market Structure The protection and savings insurance market consists of 11 insurers. Yet, the top three companies held over 75% of the market in Q1 2017. The remaining 8 insurers write only about 25% of the gross premiums in the market. Furthermore, we find that some insurers in this sector are characterized by specialization in specific products, but lack the scale to operate successfully in overcrowded and highly competitive markets. In our opinion, they need to differentiate their products in a clear way to attract new insurance buyers. Only companies with the capital strength, time to build scale, and develop an effective competitive advantage will continue to prosper. Market Share Concentration - Q1 2017 Protection & Savings Insurance (SAR million) Gross Premium Written Q1 2016 Q1 2017 Growth 253 254 0.5% Net Premium Written 121 127 4.8% Net Premium Earned 117 108 (8.1%) Net Claims Incurred Claims Ratio 13 48 48 0.3% 40.7% 44.4% 9.2% 8 Co mpanies 25 % 3 Co mpanies 75 % albilad-capital.com/Research
14. August 17 , 2017 | Sector Reports Saudi Insurance Sector Consolidated Financial Statements Balance Sheet (SAR million) Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Cash & cash quivalents 3,839 4,367 6,855 6,814 7,684 Investments 4,598 6,372 7,874 10,474 11,671 Receivables, net 6,130 7,646 8,476 9,326 9,239 Reinsurers' share 5,917 8,316 9,357 8,843 8,766 Other assets 2,660 3,871 3,721 4,274 3,958 Total policyholders’ assets 23,143 30,572 36,284 39,730 41,318 Cash and cash equivalents 3,544 3,654 3,929 4,365 4,410 Investments 4,985 5,308 6,163 7,964 8,493 Other assets 1,539 1,509 1,431 1,520 2,760 Total Shareholders’ assets 10,068 10,472 11,523 13,849 15,664 Total assets 33,212 41,044 47,807 53,579 56,982 Gross outstanding claims 6,191 10,381 11,820 12,202 13,580 Gross unearned premiums 10,398 12,812 16,141 18,270 17,768 Other liabilities 6,555 7,379 8,324 9,258 9,970 Total policyholders’ liabilities 23,143 30,572 36,284 39,730 41,318 Shareholders' liabilities 1,118 2,110 1,845 1,916 2,168 Share capital 7,632 8,762 9,642 11,592 10,479 Total reserves and others 1,319 (400) 36 341 3,017 Total shareholders' liabilities and equity 10,068 10,472 11,523 13,849 15,664 Total PH liabilities and SH liabilities & equity 33,212 41,044 47,807 53,579 56,982 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Gross premiums written 6,413 8,157 10,257 11,306 11,028 Net premiums written 4,732 6,080 8,033 9,181 9,454 Net premiums earned 3,088 4,512 5,949 7,329 7,255 Gain (loss) on investments 81.575 92 110 63 182 Gross claims paid 3,945 4,632 5,671 6,419 6,365 Net claims incurred 1,145 3,827 4,898 5,691 5,811 Surplus (deficit) from insurance operations (119) (70) 38 444 387 Shareholder's appropriation from surplus (deficit) 128 85 (17) (397) (337) Net income (loss) for the period (67) (59) (18) 306 315 Policyholders’ assets Shareholders assets Policyholders’ (PH) liabilities Shareholders' (SH) liabilities and equity Income Statement (SAR million) 14 albilad-capital.com/Research
15. August 17 , 2017 | Sector Reports Saudi Insurance Sector Concentration of Insurance Segments per Company Concentration of Insurance Segments per Company Company Health Insurance Vehicle Insurance General Insurance Protection & Savings Total Bupa Arabia 100.0% 0.0% 0.0% 0.0% 100.0% Enaya 100.0% 0.0% 0.0% 0.0% 100.0% Sagr Insurance 77.4% 15.8% 6.8% 0.0% 100.0% MEDGULF 77.1% 11.0% 11.9% 0.0% 100.0% Tawuniya 71.7% 17.1% 11.1% 0.0% 100.0% Solidarity 67.2% 17.7% 11.6% 3.5% 100.0% METLIFE AIG ANB 63.5% 16.3% 10.0% 10.2% 100.0% Amana Insurance 0.0% 91.0% 9.0% 0.0% 100.0% AlRajhi Takaful 8.9% 86.9% 3.4% 0.9% 100.0% Salama 11.5% 84.7% 3.8% 0.0% 100.0% Malath Insuranc 10.5% 83.2% 6.3% 0.0% 100.0% AXA Cooperative 11.2% 80.9% 7.0% 0.8% 100.0% Walaa 4.5% 75.3% 20.2% 0.0% 100.0% Trade Union 17.6% 69.0% 13.4% 0.0% 100.0% Buruj 24.8% 67.0% 8.2% 0.0% 100.0% Allianz SF 4.9% 66.7% 17.6% 10.8% 100.0% Alinma Tokio M 0.0% 65.1% 28.7% 6.2% 100.0% Gulf Union 16.5% 64.7% 18.8% 0.0% 100.0% Al Alamiya 0.0% 63.7% 34.4% 2.0% 100.0% WAFA Insurance 28.1% 62.7% 9.2% 0.0% 100.0% ACIG 29.8% 56.8% 13.4% 0.0% 100.0% Al-Ahlia 20.0% 53.2% 26.8% 0.0% 100.0% Wataniya 0.0% 52.9% 41.3% 5.8% 100.0% UCA 17.4% 5.2% 77.4% 0.0% 100.0% CHUBB 0.0% 42.1% 57.9% 0.0% 100.0% Jazira Takaful 0.0% 0.0% 0.0% 100.0% 100.0% ATC 0.0% 0.0% 0.0% 100.0% 100.0% SABB Takaful 0.0% 0.0% 16.8% 83.2% 100.0% Gulf General 11.6% 42.7% 45.6% 0.0% 100.0% SAICO 31.7% 23.2% 45.1% 0.0% 100.0% Arabian Shield 47.9% 23.3% 28.8% 0.0% 100.0% AICC 44.4% 36.1% 19.5% 0.0% 100.0% Health Insurance Vehicle Insurance General Insurance Protection & Savings Multi Insurance 15 albilad-capital.com/Research
16. August 17 , 2017 | Sector Reports Saudi Insurance Sector Financial Indicators Financial Indicators (15 Aug 2017) (SAR) Issued Shares (Million) Free Floating Shares (Million) Net Income 2016 (Million) Tawuniya 91.06 125.0 66.71 899.7 2,643.8 METLIFE AIG ANB 20.42 35.0 10.51 -25.1 Jazira Takaful 28.11 35.0 10.50 MALATH INSURANCE 21.34 12.0 MEDGULF 12.01 Allianz SF Closing Price Shareholders Equity Market Cap. (Million) (SAR mn) Earning Per Share (SAR) Price to Equity* Price to Book Value* 11,382.5 7.20 12.65 4.3 229.7 714.7 -0.72 - 3.1 27.5 385.9 983.9 0.79 35.80 2.5 12.00 -148.1 96.4 256.1 -12.34 - 2.7 100.0 36.50 -40.6 857.1 1,201.0 -0.41 - 1.4 36.26 20.0 7.00 26.5 229.9 725.2 1.33 27.38 3.2 Salama 19.08 25.0 17.50 34.2 206.1 477.0 1.37 13.94 2.3 WALAA 28.11 40.0 37.78 129.1 465.0 1,124.4 3.23 8.71 2.4 Arabian Shield 46.89 20.0 13.94 94.2 329.1 937.8 4.71 9.96 2.8 SABB Takaful 26.81 34.0 12.26 10.2 362.0 911.5 0.30 89.28 2.5 SAICO 19.92 25.0 17.30 60.0 306.0 498.0 2.40 8.31 1.6 WAFA Insurance 25.19 12.2 10.36 26.8 124.3 307.3 2.20 11.45 2.5 Gulf Union 17.83 15.0 10.20 30.1 152.5 267.5 2.01 8.88 1.8 ATC 36.51 16.7 8.17 35.0 223.1 608.5 2.10 17.37 2.7 Al-Ahlia 11.32 16.0 15.10 -12.1 103.5 181.1 -0.76 - 1.8 ACIG 15.14 20.0 12.00 9.5 128.3 302.8 0.47 31.97 2.4 AICC 15.77 26.5 17.36 10.4 248.5 417.9 0.39 40.26 1.7 Trade Union 19.86 27.5 18.35 51.6 308.4 546.2 1.88 10.58 1.8 Sagr Insurance 26.74 25.0 17.50 88.1 510.1 668.5 3.52 7.59 1.3 UCA 14.28 49.0 32.08 114.8 423.3 699.7 2.34 6.10 1.7 Saudi Re 6.76 100.0 89.80 43.7 809.2 676.0 0.44 15.49 0.8 Bupa Arabia 115.12 80.0 50.23 594.8 2,049.0 9,209.6 7.44 15.48 4.5 AlRajhi Takaful 54.55 40.0 18.40 115.2 458.6 2,182.0 2.88 18.94 4.8 47 10.0 5.50 44.2 234.3 470.0 4.42 10.63 2.0 AXA Cooperative 20.44 45.0 22.09 45.7 512.0 919.8 1.02 20.12 1.8 Gulf General 17.5 20.0 13.00 24.3 194.1 350.0 1.21 14.42 1.8 Buruj 33.97 25.0 15.93 100.6 341.0 849.3 4.02 8.44 2.5 Al Alamiya 28.65 40.0 12.00 47.2 345.3 1,146.0 1.18 24.31 3.3 Solidarity 18.75 25.0 17.83 52.9 254.5 468.8 2.12 8.87 1.8 Wataniya 31.69 20.0 8.50 48.1 200.2 633.8 2.41 13.17 3.2 Amana Insurance 23.17 14.0 10.99 10.5 117.1 324.4 0.75 31.04 2.8 Enaya 18.01 20.0 14.05 -23.6 164.5 360.2 -1.18 - 2.2 Alinma Tokio M 24.36 30.0 12.68 -8.6 292.2 730.8 -0.29 - 2.5 - 1147.9 674.10 2,516.7 14,304.6 41,532.1 2.19 13.73 2.9 Company CHUBB Insurance Sector 16 albilad-capital.com/Research
17. August 17 , 2017 | Sector Reports Saudi Insurance Sector P/E and P/BV for Insurance Companies In terms of profit, 27 companies in the insurance sector generated profits during Q1 2017. The following figure reflects the valuation levels of these companies* based on P/E and P/BV**: 6.00 5.00 AlRajhi Takaful Bupa Arabia Tawuniya P/BV 4.00 3.00 Buruj 2.00 Al Alamiya Wataniya Arabian Shield Solidarity Amana Insurance WAFA Insurance CHUBB Gulf Union SAICO Gulf General Trade Union Jazira Takaful ACIG Salama Walaa U CA Allianz SF ATC AXA Cooperative Sagr Insurance 1.00 Saudi Re 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 PE * Excluding the companies with very inflated multiples. ** Closing prices of August 15, 2017. 17 albilad-capital.com/Research
18. August 17 , 2017 | Sector Reports Saudi Insurance Sector Insurance Premiums Breakdown Insurance Premiums Breakdown Gross Written Premium (SAR million) Company Tawuniya Net Written Premium (SAR million) Net Earned Premium (SAR million) Net Claims Incurred (SAR million) Retention Ratio Claims Ratio Q1 2016 Q1 2017 Growth Q1 2016 Q1 2017 Growth Q1 2016 Q1 2017 Growth Q1 2016 Q1 2017 Growth Q1 2016 Q1 2017 Q1 2016 Q1 2017 1,701 2,019 18.7% 1,581 1,876 18.7% 1,623 1,760 8.5% 1,268 1,408 11.1% 92.9% 92.9% 78.1% 80.0% METLIFE AIG ANB 55 103 87.9% 41 88 112.2% 29 47 61.8% 22 38 76.1% 75.1% 84.8% 75.0% 81.6% Jazira Takaful 12 13 6.9% 3 2 (19.6%) 6 7 17.5% 1 1 (31.9%) 23.6% 17.8% 16.0% 9.3% Malath Insuranc 1,186 448 (62.3%) 726 422 (41.9%) 347 203 (41.5%) 292 200 (31.6%) 61.2% 94.2% 84.3% 98.6% MEDGULF 1,234 784 (36.4%) 1,075 687 (36.1%) 807 616 (23.7%) 674 567 (15.9%) 87.1% 87.7% 83.6% 92.1% Allianz SF 159 300 88.9% 117 253 116.1% 116 147 26.6% 82 112 37.2% 73.8% 84.4% 70.4% 76.3% Walaa 262 300 14.4% 200 247 23.9% 134 191 42.0% 83 109 32.4% 76.2% 82.5% 61.5% 57.4% Arabian Shield 270 240 (11.2%) 158 149 (5.7%) 84 127 50.8% 67 89 33.1% 58.6% 62.3% 79.1% 69.9% SABB Takaful 46 47 2.1% 37 38 0.8% 43 27 (36.5%) 3 4 25.1% 80.6% 79.6% 7.5% 14.9% SAICO 342 375 9.5% 195 205 4.9% 134 133 (1.0%) 104 90 (13.3%) 57.0% 54.6% 77.7% 68.0% WAFA Insurance 200 233 16.6% 171 152 (10.7%) 109 115 6.0% 50 89 79.1% 85.3% 65.3% 45.6% 77.1% Gulf Union 80 161 102.1% 33 91 180.0% 23 43 86.8% 15 26 75.8% 40.9% 56.6% 65.0% 61.2% ATC 116 118 1.5% 28 32 14.4% 18 20 11.6% 3 5 59.7% 24.1% 27.1% 17.2% 24.7% Al-Ahlia 54 46 (14.5%) 48 42 (13.5%) 60 34 (43.3%) 50 21 (58.4%) 89.8% 90.8% 83.0% 61.0% ACIG 147 82 (44.5%) 130 67 (48.5%) 107 99 (7.3%) 84 72 (14.7%) 88.5% 82.1% 78.6% 72.3% AICC 132 112 (15.1%) 82 76 (6.9%) 97 69 (28.6%) 68 41 (39.9%) 61.7% 67.7% 70.1% 59.0% Trade Union 303 229 (24.3%) 236 187 (20.6%) 175 185 5.3% 138 137 (1.0%) 77.9% 81.8% 78.9% 74.2% Sagr Insurance 69 93 33.6% 59 82 38.7% 200 28 (86.2%) 86 18 (79.4%) 84.9% 88.2% 43.0% 63.9% UCA 348 109 (68.7%) 154 20 (86.7%) 189 58 (69.2%) 153 4 (97.1%) 44.2% 18.7% 81.0% 7.6% 2,446 2,253 (7.9%) 2,434 2,236 (8.1%) 1,882 1,876 (0.3%) 1,604 1,669 4.0% 99.5% 99.3% 85.2% 88.9% AlRajhi Takaful 533 1,107 107.7% 501 1,076 114.8% 325 627 92.9% 271 541 99.4% 94.0% 97.2% 83.4% 86.2% CHUBB 81 84 4.7% 49 48 (1.0%) 28 24 (14.2%) 17 9 (48.0%) 60.5% 57.1% 59.4% 36.0% AXA Cooperative 451 721 60.0% 431 597 38.7% 253 308 21.8% 207 253 21.9% 95.5% 82.8% 81.9% 81.9% Gulf General 118 82 (30.5%) 61 40 (35.1%) 37 24 (34.6%) 23 14 (39.5%) 52.2% 48.8% 62.5% 57.8% Buruj 126 177 40.1% 116 166 43.1% 99 105 6.4% 64 64 92.1% 94.1% 65.3% 61.4% Al Alamiya 109 86 (20.8%) 62 59 (5.0%) 61 33 (46.1%) 30 7 (76.0%) 56.5% 67.9% 48.9% 21.8% Solidarity 98 36 (63.3%) 88 31 (64.7%) 61 50 (18.5%) 29 22 (23.8%) 90.1% 86.6% 47.3% 44.2% Wataniya 220 266 21.1% 99 137 39.1% 64 72 11.6% 45 42 (7.7%) 44.9% 51.6% 70.7% 58.5% Amana Insurance 71 23 (67.6%) 49 9 (81.6%) 87 18 (79.0%) 52 16 (68.7%) 68.9% 39.1% 60.4% 90.0% Enaya 31 49 58.2% 19 48 156.5% 12 30 154.8% 10 20 94.7% 60.2% 97.6% 86.2% 65.9% Alinma Tokio M 164 104 (36.7%) 65 72 10.8% 24 31 31.4% 19 18 (3.4%) 39.4% 69.0% 79.1% 58.1% 11,306 11,028 (2.5%) 9,181 9,454 3.0% 7,329 7,255 (1.0%) 5,689 5,811 2.1% 2.1% 85.7% 77.6% 80.1% Bupa Arabia Total 18 0.0% albilad-capital.com/Research
19. August 17 , 2017 | Sector Reports Saudi Insurance Sector Retention Ratio Breakdown - Q1 2017 Retention Ratio Breakdown Company Health Insurance Vehicle Insurane General Insurance Overall Tawuniya 99.5% 100.0% 39.5% 92.9% METLIFE AIG ANB 97.5% 96.9% 14.5% 84.8% Jazira Takaful 17.8% Malath Insuranc 100.0% 100.0% 8.5% 94.2% MEDGULF 100.0% 70.7% 23.1% 87.7% Allianz SF 48.8% 99.4% 32.0% 84.4% Salama 98.3% 98.4% 23.8% 95.6% Walaa 97.3% 99.5% 16.1% 82.5% Arabian Shield 100.0% 50.6% 8.8% 62.3% 15.8% 79.6% SABB Takaful SAICO 93.2% 98.6% 4.8% 54.6% WAFA Insurance 66.0% 73.5% 7.3% 65.3% Gulf Union 80.7% 59.6% 25.3% 56.6% ATC 27.1% Al-Ahlia 92.4% 98.5% 74.3% 90.8% ACIG 73.0% 97.9% 35.2% 82.1% AICC 63.5% 97.2% 22.6% 67.7% Trade Union 70.4% 96.4% 21.3% 81.8% Sagr Insurance 91.9% 96.1% 27.3% 88.2% UCA 53.2% 47.0% 9.1% 18.7% Bupa Arabia 99.3% AlRajhi Takaful 99.7% CHUBB 99.3% 99.6% 32.6% 97.2% 97.7% 27.6% 57.1% AXA Cooperative 102.2% 81.1% 68.4% 82.8% Gulf General 38.4% 79.1% 23.1% 48.8% Buruj 99.5% 99.3% 34.7% 94.1% 1290.0% 96.8% 18.1% 67.9% 97.5% 95.6% 29.6% 86.6% 89.2% 8.7% 51.6% 39.4% 36.3% 39.1% Al Alamiya Solidarity Wataniya Amana Insurance 100.0% Enaya 97.6% Alinma Tokio M Sector 19 97.6% 97.6% 96.6% 10.4% 69.0% 78.6% 31.8% 80.1% albilad-capital.com/Research
20. August 17 , 2017 | Sector Reports Saudi Insurance Sector 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 premium written 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 premiums written minus changes in net premiums unearned. Net Claims Paid: Total amount of paid liabilities for a policy over a given valuation period minus reinsurers share. Net Claims Incurred: Net claims paid 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 owed as a percentage of net premium earned. 20 albilad-capital.com/Research