saudi arabia’s insurance industry ......q1 2021 - ksa insurance companies saudi arabia’s...

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Badri Management Consultancy

Q1 2021 - KSA Insurance Companies

SAUDI ARABIA’S INSURANCE INDUSTRY

PERFORMANCE ANALYSIS – Q1

2021

JUNE 9, 2021




Badri Management Consultancy is proud to have won the Strategic Partner ofthe Industry at the 7th Middle East Insurance Industry Awards 2020 conductedby Middle East Insurance Review.

The award is a reflection of the trust and loyalty of our esteemed clients, andthe hard work and dedication of all our people at Badri.Apart from excellence in core actuarial services, Badri has raised the bar inproviding industry insights with market specific reports, trainings, newsletters,and data analytics with an aim to benefit the insurance industry at large.

Thank you Middle East Insurance Review and the judges for acknowledging allthe efforts put in behind the scenes.




Badri Management Consultancy is thefastest growing Actuarial Consulting Firmin the Middle East, recognized for itscollaborative approach to working withits clients as Profit Optimizing Partners.We are serving as Appointed Actuary forover 20 companies in the GCC. Inaddition, we are providing other servicesincluding IFRS17 Implementations,Development of ERM Framework,Specialized services for Medical Insuranceand TPAs, Business Intelligence solutionsand End of Service Benefits Valuations.

ABOUT BADRI

MANAGEMENT CONSULTANCY




MISSION

We help our clients be the best version of themselves by fostering

partnerships, challenging norms and providing cutting edge solutions. We

inspire our people to constantly evolve and chase excellence with integrity in a diverse, exciting and

growth-oriented culture.

Vision

Solution architects strengthening our partners to optimize performance

Core Values

Integrity Chasing ExcellencyWe uphold the highest standards of integrity

in all of our actions by being professional, transparent and independent.

Chasing ExcellenceThrough our empowered teams, we raise the bar by challenging norms to provide cutting

edge solutions to our partners.

Fostering PartnershipsWe foster our partnerships with all our

stakeholders through collaboration, empathy and adaptability.

Breeding ExcitementWe value our people and create an exciting

environment for them to develop.

Growth-CentricWe believe in creating a vibrant culture

through continuous personal and professional growth of our people, while also

growing the business.




5

Overview of the industry Page 6

SWOT Analysis Page 7

Premium Page 8 to 14

Claims, Reserves & Profitability Analysis Page 16 to 24

Investment Analysis Page 26 to 27

Key Financial Ratios Page 29 to 39

TABLE OF CONTENT




GWP Growth Key External Drivers

5-year CAGR Annual Growth Penetration Quarterly GDP Growth Policy Rate

1.22% 2.30% 1.48% -3.90% 1.65%

NWP Growth

5-year CAGR Annual Growth

1.11% 1.00%

Retention Ratio

5-year Growth During 2021 Q1

0.00% 83.00%

ROA

During 2021 Q1

5-year Growth

0.55% 2.05%

ROI

During 2021 Q1

5-year Growth

1.02% 7.52%

Net Loss Ratio

During 2021 Q1

5-year Growth

-2.60% 83.3%

6

OVERVIEW OF THE INDUSTRY

76%

78%

80%

82%

84%

-

5,000

10,000

15,000

Q1 2020 Q1 2021

SAR

Mill

ion

s

INDUSTRY MIX

GWP NEP NCI Net Incurred Loss Ratio

2015 2016 2017 2018 2019 2020

2015 2016 2017 2018 2019 2020

2015 2016 2017 2018 2019 2020

2015 2016 2017 2018 2019 2020

2015 2016 2017 2018 2019 2020

-5%

20%

45%

70%

95%

120%

145%

170%

2015 2016 2017 2018 2019 2020

Loss Ratio

Health Motor Property

Engineering A&L Marine

Energy Aviation Industry Average

0%

20%

40%

60%

80%

100%

120%

2015 2016 2017 2018 2019 2020

Retention Ratio

Health Motor Property

Engineering A&L Marine

Energy Aviation Industry Average

2015 2016 2017 2018 2019 2020




7

SWOT ANALYSIS

Strength:

• A proactive insurance regulator issuing supportive

policies

• A number of multinational players present in the

market providing diversification and showcasing

market potential.

• Focusing on digitalization innovation and insurtech.

• Najm system for motor, has been a value added to

the insurance sector of KSA.

• Ratemaking exercise is conducted for the insurance

companies however for some other Middle East

countries it is still on non-actuarial basis

• Insurance regulatory has been promoting new

regulation by making it mandatory to insured the

belonging i.e., Motor vehicle, premises etc. Also,

the growing GDP of the country is a plus for the

Insurance industry

Developmental Areas:

• Highly competitive market especially for retail

motor and medical lines driving down prices. Need

to move away from traditional burning cost pricing

to more sophisticated GLM or Machine Learning

methodologies.

• Nphies system for medical will soon start its

operation.

• Lack of awareness of insurance apart from the

compulsory insurance and B2B insurance

• More emphasis on the TPA structure.

• Essential Industry information's should be

published on quarterly basis.

• Market has high expense ratios compared to other

regional countries and efficiencies can come in

through improvements in processes.

Opportunities:

• A large untapped and uninsured motor insurance

population

• Mergers and acquisitions are consolidating the

weaker companies and creating a lesser number of

financially stable players.

• Lack of life business penetration, can pick pace if

the right kind of products are sold through the

right channels,

Threats:

• Falling oil prices would result in lower economic

activity and growth. Thus, slowing down the

business performances throughout the industries.

• High unemployment rates among young Saudis

• Growing inflation rate.




8

Listed Insurance Companies Recorded Gross written Premiums of




GROSS WRITTEN PREMIUMS

For the 29 listed companies, the GWP grewfrom SAR 12.6 billion in Q1-2020 to SAR 12.8billion in Q1-2021 highlighting a growth of1.8%. Without Saudi Re, the GWP of theindustry has increased from SAR 12.2 billionin Q1-2020 to SAR 12.4 billion in Q1-2021signifying a growth of 1.6%.

9

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q1 2020 Q1 2021

SAR

Mill

ion

s

Gross Written Premium

Gross Written Premium

Bupa 1 1

Tawuniya 2 2

Medgulf 3 9

Saudi Re 4 5

Al-Rajhi 5 3

AXA 6 4

SAICO 7 21

Walaa 8 26

Wataniya 9 22

Malath 10 18

Arabian Shield 11 6

Allianz 12 11

Al Etihad 13 7

Gulf Union ALAhlia 14 29

Arabia 15 16

ACIG 16 12

GGI 17 25

Salama 18 13

UCA 19 27

CHUBB 20 15

Alahli 21 10

Alinma 22 19

Amana 23 24

Al Sagr 24 28

SABB 25 17

Al Alamiya 26 14

AlJazira 27 8

Enaya 28 23

Buruj 29 20

CompanyRanking

IndicationGWP Profit

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

0

5

10

15

20

25

30

35

40

452

01

1

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

SAR

Bill

ion

s

Fiscal Years

GWP & Penetration

Gross Written Premium Insurance Penetration





The top 5 companies have a combinedpremium of SAR 8.78 billion in Q1-2021 ascompared to SAR 8.62 billion in Q1-2020.

The highest GWP growth in Q1-2021 has beenshown by Saudi Re with an increase of 58% inpremiums compared to the correspondingperiod of 2020 whereas Arabia has scoredsecond largest growth of 45% in Q1-2021compare to Q1-2020. The largest decline overthe same period has shown by UCA with adecrease of 52% compared to thecorresponding period of Q1-2020

10

0%

7% 3%2% 14%

0%11%

21% 32% 45% 14% 0% 38% -52% -5% 42% -20% -25% -29% 16% -3% 13% -26% -47%

-

100

200

300

400

500

600

AX

A

SAIC

O

Wal

aa

Wat

aniy

a

Mal

ath

Ara

bia

n S

hie

ld

Alli

anz

Al E

tih

ad

Gu

lf U

nio

n…

Ara

bia

AC

IG

GG

I

Sala

ma

UC

A

CH

UB

B

Ala

hli

Alin

ma

Am

ana

Al S

agr

SAB

B

Al A

lam

iya

AlJ

azir

a

Enay

a

Bu

ruj

SAR

Mill

ion

s

OTHERS

Q1 2020 Q1 2021

-6%13%

-18%58% -6%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Bupa Tawuniya Medgulf Saudi Re Al-Rajhi

SAR

Mill

ion

s

TOP FIVE

Q1 2020 Q1 2021

Q1 202169%

Q1 202131%

Q1 202069%

Q1 202031%

GWP DISTRIBUTION

Top Five

Others





11

Bupa

Tawuniya

Medgulf

Saudi Re

Al-Rajhi

AXA

SAICO

Walaa

Wataniya

Malath

Arabian Shield

Allianz

Al Etihad

Gulf Union ALAhlia

Arabia

ACIG

GGI

Salama

UCA

CHUBB

Alahli

Alinma

Amana

Al Sagr

SABB

Al Alamiya

AlJazira

Enaya

Buruj

0

5

10

15

20

25

30

0

5

10

15

20

25

30

0 5 10 15 20 25 30

RANKING

Profit - Ranking GWP - Ranking




12

It can be inferred that Growth in NEP and NWP have followed same pattern however there hasbeen some exception may be due to some other factors.

Growth in NEP and Change in retention ratio from the period Q1-2020 to Q1-2021 havefollowed same pattern i.e., increase in growth of Net Earned Premium is followed by increase inthe retention ratio for the period.

EARNED PREMIUM

-100%

-50%

0%

50%

100%

150%

200%

250%

Taw

un

iya

Mal

ath

Med

gulf

Alli

anz

Sala

ma

Wal

aa

Ara

bia

n S

hie

ld

SAB

B

SAIC

O

Gu

lf U

nio

n A

LAh

lia

Ala

hli

AC

IG

Ara

bia

Al E

tih

ad

Al S

agr

UC

A

Sau

di R

e

Bu

pa

Al-

Raj

hi

CH

UB

B

AX

A

GG

I

Bu

ruj

Al A

lam

iya

Wat

aniy

a

Am

ana

Enay

a

Alin

ma

Growth in NEP & NWP

Growth in NEP Growth in NWP

-100%

-50%

0%

50%

100%

150%

200%

250%

Taw

un

iya

AlJ

azir

a

Mal

ath

Med

gulf

Alli

anz

Sala

ma

Wal

aa

Ara

bia

n S

hie

ld

SAB

B

SAIC

O

Gu

lf U

nio

n A

LAh

lia

Ala

hli

AC

IG

Ara

bia

Al E

tih

ad

Al S

agr

UC

A

Sau

di R

e

Bu

pa

Al-

Raj

hi

CH

UB

B

AX

A

GG

I

Bu

ruj

Al A

lam

iya

Wat

aniy

a

Am

ana

Enay

a

Alin

ma

Growth in NEP vs Change in Retention ratio

Growth in NEP Change in Retention Ratio




RETENTION RATIO

13

The highest retention ratio for Q1-2021 of 100% is reflected by Enaya, whereas the lowestretention ratio of 39% is reflected by Al Alamiya.

The weighted average retention ratio for listed companies stood at 86% for Q1-2021 (YE2020: 82%).

The retention ratio has been calculated as a ratio of net written premium to gross writtenpremium. Although there may be exceptions, retention ratios are generally reflective of thelines of business being underwritten; Motor and Medical generally tend to have highretention ratios, while commercial lines such as Aviation, Engineering and Fire tend to havelower retentions. Also, since this analysis does not segregate life and non-life business, theCompanies writing higher volumes of life, especially IL and PA, would also tend to showhigher retention levels.

0%

20%

40%

60%

80%

100%

120%

Enay

a

Bu

pa

Sau

di R

e

Sala

ma

AlJ

azir

a

AX

A

Al S

agr

Mal

ath

Taw

un

iya

Al E

tih

ad

Al-

Raj

hi

AC

IG

Bu

ruj

Am

ana

GG

I

Med

gulf

Gu

lf U

nio

n A

LAh

lia

Wal

aa

Ara

bia

SAB

B

SAIC

O

Ala

hli

Ara

bia

n S

hie

ld

Alin

ma

Wat

aniy

a

CH

UB

B

Alli

anz

UC

A

Al A

lam

iya

RETENTION RATIO

Retention Ratios Weighted Average




RETENTION RATIO

14

Overall, the insurance sector has witnessed growth in retention ratio since 2016 till 2018which has mainly driven by increase in proportion of health and motor insurance business.From 2019 the retention ratio has decreased followed by major decrease in the retentionratio of general insurance.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Overall

Motor Insurrance

Health Insurrance

General Insurrance

Yearly Retention Ratio by LOBs

2015 2016 2017 2018 2019 2020




15

Listed Insurance Companies Recorded Profits at




16

Total net reserves as at Q1-2021 are SAR 31.5 billion.

Total Net Reserve of top five companies by Net Reserves as at Q1-2021 is SAR 20.2 billion.

NET TECHNICAL RESERVES

Top Five64%

Others36%

NET RESERVES

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Bupa Tawuniya Al-Rajhi Saudi Re MedgulfSA

R M

illio

ns

TOP FIVE

Net Reserves Q1 2020 Net Reserves Q1 2021

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

AX

A

AlJ

azir

a

Alli

anz

Wal

aa

Al E

tih

ad

Gu

lf U

nio

n A

LAh

lia

Mal

ath

Wat

aniy

a

SAIC

O

SAB

B

Ara

bia

n S

hie

ld

AC

IG

Sala

ma

Al S

agr

Ara

bia

Am

ana

UC

A

Bu

ruj

GG

I

Alin

ma

Enay

a

CH

UB

B

Al A

lam

iya

Ala

hli

SAR

Mill

ion

s

OTHERS

Net Reserves Q1 2020 Net Reserves Q1 2021




17

The graph above shows the proportion of each company’s Net Reserves to its Net WrittenPremium.

NET TECHNICAL RESERVES

0% 100% 200% 300% 400% 500% 600% 700%

AlJazira

SABB

Allianz

Buruj

Al Sagr

UCA

Gulf Union

Alinma

Al Alamiya

Al Etihad

Al-Rajhi

Amana

Enaya

AXA

Salama

Walaa

ACIG

Wataniya

Saudi Re

Arabian Shield

Tawuniya

Medgulf

Arabia

Malath

Bupa

CHUBB

SAICO

GGI

Alahli

% of Net Reserves to Net Written Premium over the years

Q1 2020 Q1 2021




18

The Growth of Net Claims Incurred has followed an uneven pattern. Major decline in theclaims has been witnessed from 2020 Q1 to 2020 Q2, which is primarily due to the outbreakof COVID-19.

Net claims Incurred has increased by 12% from 2020 Q3 to 2020 Q4. However, there is adecrease of 6% in the Net Claims incurred in Q1-2021. The reason for a decrease might bebecause things had started to open post covid, medical deferred claims kicked in Q4-2020but then got normalized and hence reduction in Q1 -2021. As for Motor, the claims has beenreported as things started to get into its usual pace after the lockdown has been removed.

NET CLAIMS INCURRED & GROWTH

-30%

-20%

-10%

0%

10%

20%

30%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20

19

-Q1

20

19

-Q2

20

19

-Q3

20

19

-Q4

20

20

-Q1

20

20

-Q2

20

20

-Q3

20

20

-Q4

20

21

-Q1

Gro

wth

%

SAR

Mill

ion

s

Fiscal Years

Net Claims Incurred & Growth

Net Claims Incurred Growth




COMBINED RATIO

19

The weighted average combined ratio for Q1-2021 is 102% (YE 2020: 98%).

Highest combined ratio of 163% was shown by Al Sagr while the lowest 87% combinedratio was reflected by Al Jazira.

131%116% 111% 104% 114%

32%46% 50% 53% 27%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Al Sagr UCA Enaya GGI Gulf Union ALAhlia

TOP FIVE - COMBINED RATIO

Loss Ratio Expense Ratio

101%77% 75%

36%

91% 92%75% 80% 78% 71% 69% 77% 74%

86% 83% 73% 76%

43%

86%62% 70% 69% 76%

64%

35%57% 54%

89%

33% 30%43% 35% 29% 33% 35% 26% 27%

15% 16%26% 21%

54%

11%34% 23% 20% 13%

23%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Am

ana

Bu

ruj

Alin

ma

Al A

lam

iya

Alli

anz

Wal

aa

Wat

aniy

a

SAIC

O

Mal

ath

SAB

B

Sala

ma

Ala

hli

Ara

bia

Taw

un

iya

Med

gulf

AC

IG

Al E

tih

ad

CH

UB

B

Bu

pa

Sau

di R

e

AX

A

Al-

Raj

hi

Ara

bia

n S

hie

ld

AlJ

azir

a

OTHERS

Loss Ratio Expense Ratio Industry Combined Ratio




LOSS RATIO

20

During Q1-2021, weighted average loss ratio remained at 83% (YE 2020: 77%).

Loss Ratio has been calculated by dividing Net Incurred Claims and Change in Other reservesto the net earned premiums.

Highest Loss ratio of 131% is shown by Al Sagr whereas the lowest of 36% is shown by AlAlamiya.

0%

20%

40%

60%

80%

100%

120%

Am

ana

Wal

aa

Alli

anz

Taw

un

iya

Bu

pa

Med

gulf

SAIC

O

Mal

ath

Bu

ruj

Ala

hli

Al E

tih

ad

Ara

bia

n S

hie

ld

Wat

aniy

a

Alin

ma

Ara

bia

AC

IG

SAB

B

AX

A

Sala

ma

Al-

Raj

hi

AlJ

azir

a

Sau

di R

e

CH

UB

B

Al A

lam

iya

OTHERS - LOSS RATIO

Loss Ratio Industry Loss Ratio

0%

20%

40%

60%

80%

100%

120%

140%

Al Sagr UCA Gulf Union ALAhlia Enaya GGI

TOP FIVE - LOSS RATIO

Loss Ratio




21

During Q1-2021, weighted average Expense ratio remained at 19% (YE 2020: 21%).

Expense Ratio has been calculated by dividing the sum of G&A Expenses, net Commissionexpenses and other operational expense to Net Earned Premium.

Highest Expense ratio of 89% is shown by Al Alamiya whereas the lowest is of 11% is shownby Bupa.

EXPENSE RATIO

0%

10%

20%

30%

40%

50%

60%

Enay

a

UC

A

Wat

aniy

a

SAIC

O

Am

ana

Sala

ma

Sau

di R

e

Alli

anz

SAB

B

Al S

agr

Wal

aa

Mal

ath

Ara

bia

Gu

lf U

nio

n…

Ala

hli

AC

IG

AlJ

azir

a

AX

A

Al E

tih

ad

Al-

Raj

hi

Med

gulf

Taw

un

iya

Ara

bia

n S

hie

ld

Bu

pa

OTHERS - EXPENSE RATIO

Expense Ratio Industry Expense Ratio

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Al Alamiya Buruj Alinma CHUBB GGI

TOP FIVE - EXPENSE RATIO

Expense Ratio




G&A EXPENSE

22

Weighted average G&A Expense ratio for the industry is 15% for Q1-2021 (YE 2020: 16.5%).

Among all, Al Alamiya has the highest expense ratio of 102% whereas the lowest expenseratio of 9% is reflected by Bupa and Saudi Re.

0%

10%

20%

30%

40%

50%

60%

GG

I

Enay

a

Wat

aniy

a

Sala

ma

Alli

anz

Al S

agr

SAIC

O

SAB

B

Am

ana

Ara

bia

Ala

hli

Mal

ath

Gu

lf U

nio

n A

LAh

lia

Ara

bia

n S

hie

ld

AlJ

azir

a

AC

IG

Wal

aa

Med

gulf

Al E

tih

ad

AX

A

Al-

Raj

hi

Taw

un

iya

Sau

di R

e

Bu

pa

OTHERS

G&A Expense Ratio Weighted Average G&A Expense Ratio

0%

20%

40%

60%

80%

100%

120%

Al Alamiya CHUBB UCA Buruj Alinma

TOP FIVE

G&A Expense Ratio




COMMISSION EXPENSE

23

Saudi Re showed the highest commission expense ratio for Q1-2021 of 24%, whereas the lowestexpense ratio of -13% is reflected by Al Alamiya.

Industry Weighted Average expense ratio is at 4% (YE 2020: 5%).

Since Saudi Re has a different nature of business, the second highest commission expense ratioof 12% is achieved by Walaa.

0%

5%

10%

15%

20%

25%

30%

Saudi Re Walaa Amana AXA SAICO

TOP FIVE

Commission Expense Ratio

-15%

-10%

-5%

0%

5%

10%

AC

IG

SAB

B

Mal

ath

Al-

Raj

hi

Gu

lf U

nio

n A

LAh

lia

Al E

tih

ad

Enay

a

Al S

agr

Sala

ma

Alli

anz

Taw

un

iya

GG

I

AlJ

azir

a

Wat

aniy

a

Bu

pa

Ala

hli

Ara

bia

Bu

ruj

Alin

ma

Med

gulf

CH

UB

B

Ara

bia

n S

hie

ld

UC

A

Al A

lam

iya

OTHERS

Commission Expense Ratio Weighted Average Commissions Expense Ratio




24

The term Profit indicates the TotalProfit/Loss attributed toShareholders before Zakat andTax deductions.

Bupa booked the highest profitduring Q1-2021 of SAR 175.42million as compared to a profit ofSAR 125.66 million for thecorresponding period of Q1-2020

Gulf Union Al Ahlia booked thehighest loss of SAR 56.80 millionin Q1-2021 as compared to a lossof SAR 6.10 million in thecorresponding period of Q1-2020.

Net profit generated by 29Companies in the industry for Q1-2021 amounted to SAR 211.56million compared to a profit ofSAR 166.95 million for thecorresponding period of Q1-2020,which is an increase of around27%.

PROFIT COMPOSITION

-

50

100

150

200

Bupa Tawuniya Al-Rajhi AXA Saudi Re

SAR

Mill

ion

s

TOP FIVE

Profit for Q1 2020 Profit for Q1 2021

(70)

(60)

(50)

(40)

(30)

(20)

(10)

-

GGI Walaa UCA Al Sagr Gulf UnionALAhlia

SAR

Mill

ion

s

BOTTOM FIVE


(30) (25) (20) (15) (10)

(5) - 5

10 15 20

Ara

bia

n S

hie

ld

Al E

tih

ad

AlJ

azir

a

Med

gulf

Ala

hli

Alli

anz

AC

IG

Sala

ma

Al A

lam

iya

CH

UB

B

Ara

bia

SAB

B

Mal

ath

Alin

ma

Bu

ruj

SAIC

O

Wat

aniy

a

Enay

a

Am

ana

SAR

Mill

ion

s

OTHERS





25

Listed Insurance Companies Total Assets stood at




26

Around half the companies have total shareholder’s equity of more than SAR 400 Million, with10 being over SAR 500 million

ASSETS & SHAREHOLDER EQUITY ANALYSIS

Cash25%

Deferred2%

Investment33%

Fixed Assets1%

Receivables &

Prepayments13%

Reinsurrance24%

Intangible2%

ASSETS CLASSIFICATION

5 Companies are in the range of SAR 0

M to SAR 200 M

7 Companies are in the

range of SAR 200 M to SAR

300 M3 Companies

are in the range of SAR 300 M to SAR

400 M


range of SAR 400 M to SAR

500 M


range of SAR 500 M and

above

EQUITY SIZE & COMPANIES

- 10 20 30 40 50 60

Total Policyholders’ assets

Shareholders’ assets

Total assets

Policyholders’ liabilities and equity

Shareholders’ liabilities and equity

Total Liabilities & Equity

SAR Billions

Financial Instruments

2015 2016 2017 2018 2019 2020




27

Bupa and Tawuniya are the top 2 companies with Largest NWP and shareholder’s Equity;whereas, Saudi Re is the 3rd largest company by NWP but has secured 4th rank in the list ofhighest Shareholder’s Equity.

FINANCIAL INSTRUMENTS

Tawuniya

Saudi Re

Bupa

0

700

1,400

2,100

2,800

3,500

- 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 3,000 3,250 3,500 3,750 4,000

NW

P (

SAR

Mill

ion

s)

Shareholder's Equity (SAR Millions)

Insurance Companies' Equity vs NWP




28

Listed Insurance Companies Capital Adequacy Ratio stood at




ROE & ROA TREND

29

Return on Equity is the ratio of Net Profit for the period to Total Equity at start of the periodwhereas Return on Assets is ratio of Net Profit for the period to Total Assets (as at).

ROA and ROE has been following the same pattern however, ROE has shown more volatility tothe changes.

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

ROA ROE




NWP TO EQUITY RATIO

30

The highest Premium to Equity ratio for Q1-2021 is 1.03, shown by Medgulf, whereas thelowest ratio of 0.05 is reflected Al Alamiya.

Weighted average Premium to Equity ratio of Q1-2021 is 0.58 (YE 2020: 1.72).

The Premium to Equity ratio is calculated by taking the proportion of Net Written premium ofQ1-2021 to Total Equity as at Q1-2021. It represents the premium that pertains to each SARamount of equity held by the Companies.

-

0.20

0.40

0.60

0.80

1.00

1.20

Med

gulf

Am

ana

Taw

un

iya

AC

IG

Sau

di R

e

Bu

pa

GG

I

Wat

aniy

a

SAIC

O

Gu

lf U

nio

n A

LAh

lia

Mal

ath

Ara

bia

AX

A

Al-

Raj

hi

Sala

ma

Enay

a

Ara

bia

n S

hie

ld

Al E

tih

ad

Wal

aa

Al S

agr

Alin

ma

Ala

hli

UC

A

Alli

anz

CH

UB

B

SAB

B

Bu

ruj

AlJ

azir

a

Al A

lam

iya

Premium to Equity Ratio

Premium-Equity ratio Weighted Average




31

The highest Liquidity Ratio for Q1-2021 is 360% shown by Al Alamiya, whereas the lowestliquidity ratio of 25% is reflected by Al Ahli.

Weighted average Liquidity ratio for the period of Q1-2021 stood at 88% (YE 2020: 101%).

The liquidity ratio has been calculated as a ratio of current assets over total net technicalreserves as at March 31, 2021.

The optimum value of the Absolute Liquidity Ratio for a company is 50%. This optimum ratioindicates the sufficiency of the 50% worth absolute liquid assets of a company to pay the 100%of its worth obligations in time

LIQUIDITY RATIO

0%

50%

100%

150%

200%

250%

300%

350%

400%

Al A

lam

iya

CH

UB

B

Alin

ma

Ara

bia

n S

hie

ld

Wal

aa

Enay

a

Am

ana

AC

IG

GG

I

UC

A

Ara

bia

Mal

ath

Al S

agr

Wat

aniy

a

Sala

ma

SAIC

O

Alli

anz

Bu

ruj

Al E

tih

ad

Sau

di R

e

Me

dgu

lf

Gu

lf U

nio

n A

LAh

lia

Taw

un

iya

AX

A

SAB

B

Al-

Raj

hi

Bu

pa

AlJ

azir

a

Ala

hli

LIQUIDITY

Liquidity Ratio Weighted Average Liquidity Ratio




32

The highest Equity ratio for Q1-2021 is 0.53 shown by Buruj, whereas the lowest ratio of 0.14 isreflected Wataniya.

Weighted average Equity ratio for Q1-2021 is 0.27 (YE 2020: 0.28).

The Equity ratio is a financial ratio indicating the relative proportion of equity used to finance acompany's assets. It is calculated as Total equity as at March 31, 2021, divided by Total Assets asat March 31, 2021.

EQUITY RATIO

-

0.10

0.20

0.30

0.40

0.50

0.60

Bu

ruj

Al A

lam

iya

CH

UB

B

Al E

tih

ad

Ara

bia

n S

hie

ld

Al S

agr

Bu

pa

Mal

ath

Wal

aa

Enay

a

AX

A

GG

I

Alin

ma

AlJ

azir

a

Ara

bia

SAB

B

Sala

ma

Sau

di R

e

Al-

Raj

hi

Alli

anz

UC

A

AC

IG

Ala

hli

SAIC

O

Taw

un

iya

Gu

lf U

nio

n A

LAh

lia

Med

gulf

Am

ana

Wat

aniy

a

Equity Ratio

Equiy ratio Weighted Average




33

The highest Net leverage ratio for Q1-2021 is 6.31 shown by Wataniya, whereas the lowest of0.87 is reflected by Buruj.

For Q1-2021, the weighted average leverage ratio for the market is at 2.71 (YE 2020: 2.56).

The Leverage ratio is calculated by taking the proportion of Total Liabilities at March 31, 2021,to Net worth of the Company at March 31, 2021.

Internationally, the desired range typically falls below 5.0 for property insurers and 7.0 forliability insurers.

NET OPERATING LEVERAGE

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Wat

aniy

a

Am

ana

Med

gulf

Gu

lf U

nio

n A

LAh

lia

Taw

un

iya

SAIC

O

Ala

hli

AC

IG

UC

A

Alli

anz

Al-

Raj

hi

Sau

di R

e

Sala

ma

SAB

B

Ara

bia

AlJ

azir

a

Alin

ma

GG

I

AX

A

Enay

a

Wal

aa

Mal

ath

Bu

pa

Al S

agr

Ara

bia

n S

hie

ld

Al E

tih

ad

CH

UB

B

Al A

lam

iya

Bu

ruj

Operating Leverage

Operating Leverage Weighted Average




34

Capital Intensity Ratio shows how much business does a SAR generate. That is, the premiumwritten per SAR invested in the company. A high CIR shows that per SAR invested the companycan maximize Gross Written Premium.

It is calculated by taking a proportion of Gross Written Premium of Q1-2021 to Total Assets as atMarch 31, 2021

The Industry weighted Average Capital Intensity ratio for Q1-2021 is 18% (YE 2020: 58%).

GGI attains highest CIR of 28% whereas, lowest of 4% CIR is attained by Buruj.

CAPITAL INTENSITY RATIO

0%

5%

10%

15%

20%

25%

30%

GG

I

Bu

pa

AC

IG

Sau

di R

e

Ara

bia

SAIC

O

Med

gulf

Mal

ath

Taw

un

iya

Ara

bia

n S

hie

ld

Ind

ust

ry A

vera

ge

AX

A

Am

ana

Wat

aniy

a

Al-

Raj

hi

Sala

ma

Gu

lf U

nio

n A

LAh

lia

Enay

a

Wal

aa

Al E

tih

ad

CH

UB

B

Alin

ma

UC

A

Al S

agr

Alli

anz

Ala

hli

Al A

lam

iya

SAB

B

Bu

ruj

Cap

ital

Inte

nsi

ty R

atio

(%

)

Capital Intensity Ratio

Capital Intensity Ratio Q1 2021 Indutry Average




35

Asset Mix compares the proportion of invested assets and non-invested assets as at Q1-2021.Total Invested Assets are the sum of Property, Cash and Other Invested Assets.

Al Ahli has the highest proportion of 88% of its assets invested, while Wataniya has the lowestof 29% assets invested.

INVESTED / NON-INVESTED ASSETS TO TOTAL ASSETS

0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

27%

8%

56%

16%10%

44%

33%38%

21%27%

46%

5%

47%

27%

57% 55%

8% 9%

24%16%

36% 34%39%

50%

59%

20%

40%

54%

40%

21%

74%

9%

16%

38%

31%

23%21%

59%

8%

24%

82%8%

19%

15% 20%

24%24%

54%

57%13%

40%

9%

32% 17%

10%

14%

22%

18%

52%

18%

35%

68%

52%

26%

44% 41%

19%

65%

30%

12%

45%54%

28% 25%

69% 66%

23%28%

51%

26%

52%

18%24%

71%

46%

24%

43%

26%

33%

41%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Taw

un

iya

AlJ

azir

a

Mal

ath

Med

gulf

Alli

anz

Sala

ma

Wal

aa

Ara

bia

n S

hie

ld

SAB

B

SAIC

O

Gu

lf U

nio

n A

LAh

lia

Ala

hli

AC

IG

Ara

bia

Al E

tih

ad

Al S

agr

UC

A

Sau

di R

e

Bu

pa

Al-

Raj

hi

CH

UB

B

AX

A

GG

I

Bu

ruj

Al A

lam

iya

Wat

aniy

a

Am

ana

Enay

a

Alin

ma

Total Assets Mix

Property Cash Other Invested Assets

Non-Invested Assets Weighted Average of Property Weighted Average of Cash

Weighted Average of Other Invested Weighted Average of Non-Invested




36

Since Total Invested Assets are the sum of Property, Cash and Other Invested Assets.

The weighted average of Property to Invested Assets is 0.15%. For Cash to Invested Assets theweighted average is 44% and 56% for Other Invested to Invested Assets.

TOTAL INVESTED ASSETS MIX

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Taw

un

iya

AlJ

azir

a

Mal

ath

Med

gulf

Alli

anz

Sala

ma

Wal

aa

Ara

bia

n S

hie

ld

SAB

B

SAIC

O

Gu

lf U

nio

n A

LAh

lia

Ala

hli

AC

IG

Ara

bia

Al E

tih

ad

Al S

agr

UC

A

Sau

di R

e

Bu

pa

Al-

Raj

hi

CH

UB

B

AX

A

GG

I

Bu

ruj

Al A

lam

iya

Wat

aniy

a

Am

ana

Enay

a

Alin

ma

Total Invested Asstes Classification

Property of Invested Assets Cash of Invested Assets Other Invested

Weighted Average of Property Weighted Average of Cash Weighted Average of Other Invested




RETURN ON INVESTMENT VS CASH RATIO

37

The Graph demonstrates the relationship between the amount of cash held by the companiesvs the return on investment.

Normally, an inverse relationship is witnessed backed by the rationale that more cash in hand Iplies fewer risky investments thus lower expected yield. However, the economic downturn isreflected in the above graph that has showed a reversed relationship.

Return on Investment is calculated by taking the ratio of Investment income for the period ofQ1-2021 to the average of Invested Assets as at Q1-2020 and Q1-2021.

Tawuniya

AlJazira

Malath

Medgulf

Allianz

Salama Walaa

Arabian Shield

SABB

SAICO

Gulf Union ALAhlia

Alahli

ACIG

Arabia

Al Etihad

Al Sagr

UCA

Saudi ReBupa

Al-Rajhi

CHUBB

AXA

Buruj

Al Alamiya

Wataniya

Amana

Enaya

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

0.0% 0.5% 1.0% 1.5% 2.0%

Cas

h t

o In

vest

ed A

sset

s R

atio

Return on Investment




CAPITAL ADEQUACY RATIO

38

The Capital Adequacy Ratio (CAR) indicates how much a company is capable to absorb anyunexpected risks, hence depicting a company's financial position to meet policyholders’liabilities. Therefore, a higher ratio indicates that the companies' liabilities are on the higherside.

Capital Adequacy ratio has been calculated by taking the proportion of Total Liabilities as atMarch 31, 2021, to Total Assets as at March 31, 2021.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Wat

aniy

a

Am

ana

Med

gulf

Gu

lf U

nio

n A

LAh

lia

Taw

un

iya

SAIC

O

Ala

hli

AC

IG

UC

A

Alli

anz

Al-

Raj

hi

Sau

di R

e

Sala

ma

SAB

B

Ara

bia

AlJ

azir

a

Alin

ma

GG

I

AX

A

Enay

a

Wal

aa

Mal

ath

Bu

pa

Al S

agr

Ara

bia

n S

hie

ld

Al E

tih

ad

CH

UB

B

Al A

lam

iya

Bu

ruj

Capital Adequacy ratio

CAR Q1 2021 Weighted Average Q1 2021




39

The Tree map shows the Market size of each Company on the basis of its Total Equity as atMarch 31, 2021.

MARKET SIZE




S. No. Symbol Name Abbreviation1 8010 The Company for Cooperative Insurance TCCI

2 8012 Aljazira Takaful Taawuni Co. AJTTC

3 8020 Malath Cooperative Insurance Co. MCIC

4 8030 The Mediterranean and Gulf Insurance and Reinsurance Co. TMGIRC

5 8040 Allianz Saudi Fransi Cooperative Insurance Co. ASFCIC

6 8050 Salama Cooperative Insurance Co. SCIC

7 8060 Walaa Cooperative Insurance Co. WCIC

8 8070 Arabian Shield Cooperative Insurance Co. ARSCIC

9 8080 SABB Takaful Co. STC

10 8100 Saudi Arabian Cooperative Insurance Co. SACIC

11 8120 Gulf Union ALAhlia Cooperative Insurance Co. GUACIC

12 8130 Alahli Takaful Co. AATC

13 8150 Allied Cooperative Insurance Group ACIG

14 8160 Arabia Insurance Cooperative Co. AICC

15 8170 Trade Union Cooperative Insurance Co. TUCIC

16 8180 Al Sagr Cooperative Insurance Co. ASCIC

17 8190 United Cooperative Assurance Co. UCAC

18 8200 Saudi Re for Cooperative Reinsurance Co. SRCRC

19 8210 Bupa Arabia for Cooperative Insurance Co. BACIC

20 8230 Al-Rajhi Company for Cooperative Insurance ARCCI

21 8240 CHUBB Arabia Cooperative Insurance Co. CACIC

22 8250 AXA Cooperative Insurance Co. AXACIC

23 8260 Gulf General Cooperative Insurance Co. GGCIC

24 8270 Buruj Cooperative Insurance Co. BCIC

25 8280 Al Alamiya for Cooperative Insurance Co. AACIC

26 8300 Wataniya Insurance Co. WIC

27 8310 Amana Cooperative Insurance Co. ACIC

28 8311 Saudi Enaya Cooperative Insurance Co. SECIC

29 8312 Alinma Tokio Marine Co. ATMC

40

Analysis of the Key Performance Indicators (KPIs) of 29* Listed Insurance Companies of KSAfor Q1 2021 has been undertaken.

`*The financial statement for Q1 2021 of Saudi Indian Insurance has not been published at the date of the publication ofthis report and hence all the analysis does not include Saudi Indian Insurance

COMPANIES INCLUDED IN ANALYSIS




• Analysis of the Key Performance Indicators (KPIs) of 29 Listed Insurance Companiesof KSA for Q1-2021 has been undertaken. The data has been extracted from thefinancial statements of Q1-2021 of all companies as available on Tadawul.

• In certain cases, we needed to combine certain items for comparison purposes.

• The Report contains previous years values in few places that are taken from theIndustry Reports of previous years published by SAMA.

• While reasonable care has been taken in preparing this document and data obtainedfrom sources believed to be reliable, no responsibility or liability is accepted forerrors of fact or for any opinion expressed herein. Badri accepts no liability and willnot be liable for any loss or damage arising directly or indirectly (including special,incidental or consequential loss or damage) from your use of this document,howsoever arising, and including any loss, damage or expense arising from, but notlimited to, any defect, error, imperfection, fault, mistake or inaccuracy with thisdocument, its contents or associated services, or due to any unavailability of thedocument or any thereof or due to any contents or associated services.

• BADRI publishes reports and newsletters that provide insights for the insuranceindustry and the public. Our goal is to draw upon research and experience from ourprofessionals to bring transparency and availability of information to the industryand in the process spread brand awareness. No part of our compensation receivedfor other services directly or indirectly influences the contents of this report. TheAnalysts preparing the report are subject to internal rules on sound ethical conduct.

• This publication contains general information only and we are not by means of thispublication, rendering actuarial, investment, accounting, business, financial, legal,tax, or other professional advice or services. This publication is not a substitute forsuch professional advice or services, nor should it be used as a basis for any decisionor action that may affect your finances or your business. Before making any decisionor taking any action that may affect your finances or your business, you shouldconsult a qualified professional adviser. Should you come across an error or have aquery, do write to us

41

DISCLAIMER

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ActuarialMedical

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Intelligence

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saudi arabia’s insurance industry ......q1 2021 - ksa insurance companies saudi arabia’s...

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