RIYADH: A government pushes to enforce stronger uptake of compulsory health and automotive coverage could generate substantial new business in Saudi Arabia’s insurance sector, deepening the industry’s premium pool and strengthening its asset base. On April 10 the fourth phase in a year-long legal effort to boost compliance came into effect, requiring all companies with less than 25 employees to join larger firms in providing health insurance for their staff.
The “unified health insurance policy” was approved by Cabinet decision on April 14, 2016 and carried out in four stages by the Council of Cooperative Health Insurance, a state agency. Three previous phases mandated full compliance with health insurance laws under varying grace periods – three, six and nine months, respectively, for firms with 100-plus, 50-99 and 25-49 employees – according to global law firm Clyde & Co. Since passing the Cooperative Insurance Law in 2006, the Kingdom has transformed its insurance sector from a largely unregulated industry into what is now the GCC’s largest market for non-life and health insurance, according to a February report by S&P Global, the research arm of ratings agency Standard & Poor’s. While growth in gross written premiums was modest last year, rising 0.5% to SR35.8bn ($9.55bn), net income increased by 139% to SR2.5bn ($670m).
