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Redmoney Consulting

Coronavirus-related drop in claims drives strong H1 profit, but pressures persist

Saudi Arabia’s (A1 negative) 31 active primary insurers reported a sharp increase in profitability in the first half of 2020, as claims reduced significantly as a result of coronavirusinduced “lockdown” measures. However, we expect future claims, as a result of free motor policy extensions and rescheduled medical procedures, to erode some of this gain in the months ahead. At the same time, competitive, macroeconomic and regulatory headwinds will continue to pressure the sector's profitability, liquidity and capital, making consolidation likely.

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