KSA 2020 Medical Insurance

Medical Insurance Industry
Kingdom of Saudi Arabia

2020
0
TABLE OF CONTENT
SHMA Consulting
• About Us………………………………………………….…….3
• Our Services…………………………………………………..4
• Limitation and Disclaimers………………………….…5
Performance Summary
• Performance Highlights………………………..……...6
• Impact of Covid…………………………………………….7
Market Share, Premium & Claims

• Market Share……………………………………………..….8
• Premium Composition…………………………..……10
• Gross Written Premium………………………….…...11
• Net Written Premium……………………………..…...14
• Premium Retention Ratio……………………….…....17
• Net Earned Premium………………………………......19
• Net Incurred Claims……………………………………..22
Profitability Analysis and Ratios

• Loss Ratio……………………………………………….…..24
• Expense Ratio……………………………………………..26
• Combined Ratio………………………………………….27
Medical Insurance Industry 2020 – KSA
About Us
SHMA Consulting first offered actuarial services relating to insurance in Saudi Arabia in 2003,
and currently provides actuarial services to 8 companies in Saudi Arabia, 11 insurance
companies in the UAE and insurance companies in the GCC (Kuwait, Oman, Qatar and
Bahrain).
SHMA Consulting has been providing actuarial services to insurance companies since 1990
and to companies in the GCC (starting with the UAE) since early 1997. We are currently
engaged with some of the biggest names in the UAE Insurance Sector, including, ADNIC,
ADNTC, Orient, etc.
3
We provide a range of services to our valued business partners across the globe including
Europe, the Middle East, Southeast Asia and the Far East. Our specialty services include
financial reporting, product and business development and enterprise risk management. In
addition, our firm provides expert personnel outsourcing for allowing organizations to engage
in full-time consulting for long-term cost effectiveness.
Life Insurance Retirement Benefits

• Valuations for financial reporting
• IFRS, statutory & embedded valuations
• Advise on benefit design and cost benefit analysis
• Product development, pricing & reserving
• Pension benefits administration
• Experience studies
• Benefit communication material
• Advising on agency & broker compensation
• Provident fund maintenance software and audit
structures, reinsurance arrangements,
of retirement schemes and funds
underwriting policies and capital adequacy.
Our
Services
• ERM Framework and risk management policies
• Actuarial reserving and certifications and procedures
• Underwriting and pricing solutions • Risk identification tools and training
• Data and predictive analytics • Risk measurement and quantification by using a
• Advising on reinsurance arrangements, capital model
underwriting and claims practices • Asset liability management policy
• Profitability and capital adequacy analysis • Advising on risk appetite and controls
General Insurance ERM and Capital

Modeling
4
Limitations and Disclaimers
❖ The data used for the preparation of this report has been collected from Tadawul. The data was extracted from the financial s tatements of the listed companies.
❖ Due to the unavailability of Financial Statements of some of the listed companies, or the presence of Arabic Financials for those companies, the data could not be
extracted, and to preserve uniformity, the said companies were excluded from our analysis to avoid any misrepresentation of their numbers, which might lead to
spurious or unreasonable conclusions. Furthermore, with WAFA having been abstained from writing new business by SAMA and owin g to the acquisition between
Walaa and MetLife in 2019, both WAFA and MetLife have been excluded from the report.
❖ SSTC and Al Jazira Takaful Taawuni Co. have been merged, therefore, in our 2019 analysis we have excluded SSTC from our analysis and used merged financials.
❖ Gulf Union and Al Ahlia Cooperative insurance have been merged; therefore, we have excluded Al Ahlia Cooperative insurance from 2019 analysis and used merged
financials for Gulf Union and Al Ahlia Cooperative Insurance.
❖ Saudi Indian Cooperative Insurance Company has already filed for bankruptcy and its financials are not available on Tadawul. Therefore, we have not considered this
company in our analysis.
❖ Insurance Industry KSA has 29 insurance companies, we have included 26 insurance companies in our analysis. Also, companies having Arabic financials for YE 2019
have been excluded in our analysis.
❖ The information, materials and opinions presented in this report are for general information purposes only, are not intended to constitute legal or other professional
advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. Altho ugh we make reasonable efforts to update the
information in this report.
5
Performance Highlights
Retention Ratios
Total Premium Growth Rate
76%
2020 96%
A reduction of
14.17%
13.23%
2019 97%
2.28% 1.83%
2018 97%
2019 2020 2019 2020

Total Gross Written Premium
GWP Growth Rate NWP Growth Rate
Loss Ratios SAR 22.2 Bn

2.28%
76%
2020 83%
A reduction of Total Underwriting Result
2019 88%
Total Earned Premium
SAR 2.51 Bn
2018 90%
45.21%
SAR 21.15 Bn
4.83%
6
Impact of Covid-19
❖ The ongoing COVID-19 pandemic has had a significant impact on the global economy and the ability of individuals, businesses, and governments to operate. Across the
globe, travel, trade, business, working arrangements and consumption have been materially impacted by the pandemic.
❖ On 11 March 2020, the World Health Organization (“WHO”) declared the Coronavirus (“COVID-19”) outbreak as a pandemic in recognition of its rapid spread across
the globe. Governments all over the world took steps to contain the spread of the virus. Coronavirus (“COVID-19”) outbreak has also affected the GCC region including
the Kingdom of Saudi Arabia. KSA in particular has implemented closure of borders, released social distancing guidelines and enforced country wide lockdowns and
curfews. In Saudi Arabia, the government has imposed a nationwide curfew for a certain period all in a bid to stem the spread of COVID-19 with the exception of some
business sectors during the lockdown period. The curfew was lifted on 21 June 2020.
❖ In response to the spread of the Covid-19 virus in the Country where the insurer operates and its consequential disruption to the social and economic activities in those
markets, the insurer’s management has proactively assessed its impacts on its operations and has taken a series of preventative measures and processes to ensure the
health and safety of its employees and the wider community where it is operating, also, the continuity of its business throughout the Kingdom is protected and kept
intact.
❖ The Government’s decision to assume the medical treatment costs for both Saudi citizens and expatriates has helped in reducing Covid–19 impact. During the lockdown,
the insurer saw a decline in medical reported claims (majorly elective and non-chronic treatment claims) which resulted in a drop in claims experience. However,
subsequent to the lifting of lockdown since June 21, 2020, the insurer is experiencing a surge in claims which is in line with the expectations of the insurer’s
management. The insurer’s management has duly considered the impact of surge in claims in the current estimate of future contractual cashflows of the insurance
contracts in force as of December 31, 2020, for its liability adequacy test. It is expected that most of the deferred services have been availed as at the valuation date and
therefore the insurer has not set aside any additional provision for further deferral of medical claims.
7
Market Share Proportion
8
GWP and Rankings
1. Bupa Ara bia 12. Al l ianz Saudi
Gross Written Premiums 2. Ta wuniya 13. Sa udi Enaya
3. Medgulf 14. Al l ied Cooperative
4. AXA Coopera tive 15. Wa laa

2020 22,157 Millions
5. GUCIC 16. Sa lama
2019 21,663 Million 6. Ma l ath 17. Gul f
7. Ama na Insurance 18. Uni ted Cooperative

2018 18,974 Million
8. Al Ra jhi 19. Buruj
9. Ara bian Shield 20. Sa udi Re
10. Al Eti had 21. Al Al a miya
11. Al Sa gr Insurance 22. Al i nma Tokio
The table on the right shows that the ranking based on Gross Written Premium for the Companies that were among the top 3 in
2019 did not change in 2020. In addition to this , GWP for the year 2020 was not significantly greater than that of 2019.
9
Premium Composition
Top 10 vs Other Companies
Other Companies
The Other companies’ makeup remaining 4.78% of the Top 10 Companies

Market share
The top 10 companies’ makeup an overwhelming
95.22% of the Market share
10
Gross Written Premium – Top 10 Companies
SAR MIL L IO NS
2019 2020
12,000
10,000
8,000
Bupa Arabia captu red th e biggest market share in 2019 and 2020 followed by Tawuniya. Among the
top 10 Companies, the smallest market share was for Al Etihad for 2019 and 2020.
6,000
4,000
2,000
-
Bupa Arabia Tawuniya Medgulf AXA GUCIC Malath Amana Al Rajhi Arabian Al Etihad
Cooperative Insurance Shield
11
Gross Written Premium – Other Companies
SAR MIL L IO NS
2019 2020
400
350
Al Sagr Insurance was among the top 10 companies in 2019, however, its gross written premium 300
declined to SAR 210 million. Al Sagr Insurance still has the biggest market share when excluding the top
10 companies. United Cooperative, Saudi Enaya, Walaa and Saudi Re experienced an increase in its
250
gross written premium for th e medical line of business. For the year 2019, the lowest gross written
premium was for Al Alamiya, while for 2020, the lowest was for Alinma Tokio.
200
150
100
50
-
Al Sagr Allianz Sau di Saudi Enaya Allied Walaa Salama Gulf Unit ed Bu ruj Saudi Re Al Alamiya Alinma
In su rance Coop erative Coop erative Tokio
12
Gross Written Premium – Movement
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
Bupa Arabia Tawuniya Medgulf AXA GUCIC Malath Amana Al Rajhi Arabian Al Etihad Al Sagr Allianz Saudi Enaya Allied Walaa Salama Gulf United Buruj Saudi Re Al Alamiya Alinma
Cooperative Insurance Shield Insurance Saudi Cooperative Cooperative Tokio
The total GWP growth in YE 2020 was about 2.28% as compared to YE 2019. United Cooperative experienced th e highest growth in its gross premium
(40%) while Alinma Tokio experienced a decrease in its gross premium of about 99%. It can be noted that the range of growth among th e top 10 companies
is relatively narrow and stable when compared to other companies. 8 out of the top 10 companies experienced non-negative growth in their GWP.
13
Net Written Premium – Top 10 Companies
SAR MIL L IO NS
2019 2020
12,000
10,000
Net Written Premium was the highest for Bupa Arabia followed by Tawuniya. Among the top 10 8,000
Companies, the smallest market share on a net of reinsu rance basis was for Al Etihad for 2019 and
2020.
6,000
4,000
2,000
-
Bupa Arabia Tawuniya Medgulf AXA GUCIC Malath Amana Al Rajhi Arabian Al Etihad
Cooperative Insurance Shield
14
Net Written Premium – Other Companies
SAR MIL L IO NS
2019 2020
350
300
Al Sagr Insurance was among the top 10 companies in 2019, however, its net written premium 250
declined to SAR 188 million. Al Sagr Insurance still has the highest market share when the top 10
companies are excluded. United Cooperative, Saudi Enaya, Walaa and Saudi Re experienced an
increase in its net written premium for the medical line of business. For the year 2019, the lowest 200
gross written premium was for Al Alamiya, while for 2020, the lowest was for Alinma Tokio.
150
100
50
-
Al Sagr Allianz Sau di Saudi Enaya Allied Walaa Salama Gulf Unit ed Bu ruj Saudi Re Al Alamiya Alinma
In su rance Coop erative Coop erative Tokio
15
Net Written Premium – Movement
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
-120%
United Cooperative experienced the highest growth in its net premium (50%) while Alinma Tokio experienced a decrease in its net premium of about 99%.
It can be noted that th e range of growth among the top 10 companies is relatively narrow and stable when compared to other companies. 6 out of th e 10
top 10 companies experienced non-negative growth in their NWP.
16
Retention Ratios - Top 10 Companies
2019 2020
120%
100%
100%
100%
100%
100%
99%
99%
99%
98%
98%
98%
98%
97%
97%
96%
96%
94%
100%
86%
85%
73%
80%
The chart shows that for almost all of the top 10 companies fully retained their business (more than
95%) while the lowest being 73% for Medgulf. Retention ratios were stable for most of the
60%
companies, with the highest change being 12% for Medgulf.
40%
20%
0%
17
Retention Ratios - Other Companies
2019 2020
120%
100%
100%
100%
100%
100%
100%
100%
97%
94%
92%
92%
91%
91%
90%
100%
90%
88%
83%
80%
79%
80%
54%
50%
60%
46%
46%
44%
40%
20%
0%
AL SAG R ALLIANZ SAU DI SAU DI E NAYA ALLIE D WALAA SALAMA GULF UNITE D BURUJ SAU DI RE AL ALAMIYA ALINMA T OKIO
INSU RANCE COOP E RAT IVE COOP E RAT IVE
The highest retention ratio was 100% for Saudi Enaya, Saudi Re, Al Alamiya and Alinma Tokio, with the lowest being 46% for Allianz Saudi (2020).
Retention ratio for Al Alamiya increased by 56% while Salama had its retention ratio decreased by 9%. For all oth er companies, the reten tion ratios do not
vary greatly.
18
Earned Premium – Top 10 Companies
SAR MIL L IO NS
2019 2020
12,000
10,000
8,000
Bupa Arabia had the highest net Earned Premium for th e year 2019 and 2020 of about 9.3 billion and
10.7 billion, respectively. Al Etihad had the lowest net Earned Premium in both the years. Al Rajhi
experienced a 50% dec rease in its net earned premium while Bupa Arabia experienced an increase of 1
6,000
billion. Net Earned Premium for all other companies was relatively stable.
4,000
2,000
19
Earned Premium – Other Companies
SAR MIL L IO NS
2019 2020
350.00
300.00
250.00
200.00
150.00
100.00
50.00
-
AL SAG R ALLIANZ SAU DI SAU DI E NAYA ALLIE D WALAA SALAMA GULF UNIT E D BURUJ SAU DI RE AL ALAMIYA ALINMA T OKIO
INSU RANCE COOP E RAT IVE COOP E RAT IVE
Al Sagr had the high est net earned premium (SAR 275 million) followed by Saudi Enaya. Al Alamiya and Alinma Tokio had the lowest net earned premium
in 2020. Saudi Enaya’s net earned premium increased by 77% in 2020 while Buruj’s net earned premium was halved.
20
Earned Premium – Movement
150%
100%
50%
0%
-50%
-100%
-150%
GUCIC almost doubled its net premium earnings from 176 million to 340 million. On the other hand, Alinma Tokio (-94%) and Al Alamiya (-89%) had to
suffer a major decline in th eir NEP numbers this year. Change in net Earned Premium was relatively stable for the top 10 companies compared to th e
remaining companies with the highest change being in GUCIC of about 100%.
21
Net Incurred Claims - Top 10 Companies
SAR MIL L IO NS
2019 2020
10,000
9,000
8,000
7,000
The highest Net Incurred Claims were for Bupa Arabia SAR 7.7 billion (2019) and SAR 8.7 billion 6,000
(2020). Al Etihad had the lowest Net Incurred Claims for 2019 and 2020. Al Rajhi experienced a
decrease of about 64% while GUCIC experienced an increase of about 80%. These changes are 5,000
insignificant when compared to the change of 1 billion in Bupa Arabia.
4,000
3,000
2,000
1,000
22
Net Incurred Claims - Other Companies
SAR MIL L IO NS
2019 2020
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
(50.00)
AL S AGR AL L IANZ S AUDI S AUDI ENAY A AL L IED WAL AA S AL AMA GULF UNIT ED BURUJ S AUDI R E AL AL AMIY A A L I N M A T O K IO
INS UR ANCE C O O P E RA T IV E C O O P E RA T IV E
As for the remaining companies, Al Sagr Insurance had the highest Net Incurred Claims (308 million in 2019 and 352.77 million in 2020). In addition to
this, Al Alamiya experienced the lowest Net Incurred Claims.
23
Loss Ratios - Top 10 Companies
2019 2020
140%
126%
120%
100%
97%
95%
91%
100%
90%
87%
86%
85%
84%
83%
83%
83%
82%
81%
81%
For the year 2019, Al Rajhi had the highest loss ratio of 126% while the lowest being 81% for AXA
79%
77%
77%
76%
Cooperative. For the year 2020, th e highest loss ratio was for Amana Insurance of about 95% and the 80%
lowest loss ratio was Al Etihad of about 76%. Al Rajhi and Arabian Shield ware able to improve its
position by decreasing its loss ratio by 39% and 23% respectively.
60%
40%
20%
0%
24
Loss Ratios - Other Companies
172%
2019 2020
170%
133%
128%
121%
114%
120%
102%
98%
96%
94%
93%
87%
87%
86%
86%
85%
84%
82%
75%
73%
57%
70%
56%
For the year 2019, th e highest loss ratio for th e remaining companies was for 133% for Saudi Re and
52%
51%
the lowest was for 56% for Al Alamiya. For the year 2020, the highest loss ratio was for Al Alamiya
(172%) and the lowest was for Alinma Tokio (-116%). Loss ratio was more than 100% for Al Sagr
Insurance and Al Alamiya Insurance. Al Alamiya’s loss ratio drastically increased to 3 times the loss 20%
ratio in 2019. Alinma Tokio’s Loss ratio decreased by 202%.
-30%
-80%
-116%
-130%
Al Sagr Allianz Sau di Saudi Enaya Allied Walaa Salama Gulf Unit ed Bu ruj Saudi Re Al Alamiya Alinma Tokio
In su rance Coop erative Coop erative
25
Expense Ratio
48%
50%
45%
40%
39%
40%
33%
32%
35%
31%
29%
29%
27%
30%
23%
22%
25%
21%
19%
17%
16%
20%
16%
14%
14%
13%
15%
11%
10%
10%
3%
5%
0% BU PA ARABIA T AWU N IYA M E D G U L F AXA G U CIC M AL AT H AM AN A AL RAJH I ARABIAN AL E T IH AD S AG R AL L IAN Z S AU D I E N AYA AL L IE D WAL AA S AL AM A G U L F U N IT E D BU RU J S AU D I RE AL AL AM IYA AL IN M A
COOPE RAT IVE IN S U RAN CE S H IE L D IN S U RAN CE S AU D I COOPE RAT IVE COOPE RAT IVE T OKIO
The highest Expense ratio for medical business in 2020 was of Allianz Saudi (48%), followed by Amana Insurance (40%). The lowest ratio was of Alinma
Tokio (3%) and Bupa Arabia (10%).
26
Combined - Ratio
Combined Ratio 2020
200% 183%
135% 142%
150% 125%
116% 118% 110% 118%
106% 102% 100% 108% 108%
92% 97% 95% 94% 98% 91% 95%
100% 79%
50%
0%
-50%
-100%
-113%
-150%
Combined Ratio was the highest for Al Alamiya (183%) and was the lowest for Alinma Tokio (-113%). 13 out of 22 companies had a combined ratio of
more than 100%. Combined Ratio for Alinma Tokio is negative due to its negative loss ratio.
27
Net UW Profit/(Loss) – Top 10 Companies
SAR MIL L IO NS
1,600.0
2019 2020
1,400.0
1,200.0
1,000.0
800.0
Bupa Arabia had the highest Net Underwriting Profit/(Loss) in both the year with no substantial
600.0
difference in th e two years (SAR 1.4 billion). Tawuniya’s Net Underwriting Profit doubled to about
600 million. Al Rajhi was able to improve its position form a net underwriting loss in 2019 to a net
400.0
underwriting profit in 2020.
200.0
(200.0)
(400.0)
28
Net UW Profit/(Loss)– Other Companies
2019 2020
100.0
80.0
60.0
40.0
20.0
(20.0)
(40.0)
(60.0)
(80.0)
(100.0)
(120.0)
AL S AGR AL L IANZ S AUDI S AUDI ENAY A AL L IED WAL AA S AL AMA GULF UNIT ED BURUJ S AUDI R E AL AL AMIY A A L I N M A T O K IO
INS UR ANCE C O O P E RA T IV E C O O P E R A T IV E
The highest net underwritin g profit was for Allianz Saudi in both 2019 and 2020. In 2019, the highest net loss was Saudi Enaya and the high est net loss in
2020 was for Al Sagr Insurance.
29
Net UW Profit/(Loss) – Movement
4000%
3413%
3500%
3000%
2500%
2000%
1500%
1099%
1000%
500% 365%
243%
99% 26% 15% 9%
0%
-1% -110% -17% -27% -72%
-500% -188% -137% -175% -155% -130% -156%
-432%
-1000%
-1052%
-1500%
Bupa Arabia Tawuniya Medgulf AXA GUCIC Malath Amana Al Rajhi Arabian Al Etihad Al Sagr Allianz SaudiSaudi Enaya Allied Walaa Salama Gulf United Buruj Saudi Re Alinma
Cooperative Insurance Shield Insurance Cooperative Cooperative Tokio
The highest change was experienced by Amana Insurance, followed by Gulf and Al Eithad, while there was about negligible change in Bupa Arabia. As
GUCIC, Al Rajhi, Arabian Shield, Al Etihad, Saudi Enaya, Walaa and Saudi Re moved from negative to positive, the movemen t is with a n egative sign. Buruj
had a net loss in 2019 and the loss reduced in 2020, thus the change is shown as negative.
30
Meet the Team
Zeeshan Ali ASA, AIA, APSA, Zaid Muzammil Noman Usman Shahadat Walli
Manager Assistant Manager Senior Actuarial Analyst Actuarial Analyst
Bilal Shakir Muhammad Umar Inam Elahi Aisha Ishfaq

Actuarial Analyst Actuarial Analyst Actuarial Analyst Actuarial Analyst
Kashmayen Karim Muhammad Maaz Ahmed

Actuarial Analyst Actuarial Trainee
31
Feedback About Us
SHMA Consulting is proud to present Medical Insurance Industry SHMA Consulting has been providing actuarial services to
Analysis – Kingdom of Saudi Arabia for the Year-End 2020. We have a insurance companies since 1990 and to companies in the GCC
dedicated and talented pool of individuals to bring you industry insights (starting with the UAE) since early 1997.
in the form of this report.
We welcome your feedback on the analysis presented in this report.
info@shmaconsulting.com
https://www.linkedin.com/company/shma-consulting/ P.O. Box 340505, Dubai, UAE
www.shmaconsulting.com
+971 56 183 1095, +971 52 831 4612
32

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Medical Insurance Industry

Kingdom of Saudi Arabia

Market Share, Premium & Claims

Profitability Analysis and Ratios

Life Insurance Retirement Benefits

General Insurance ERM and Capital

Limitations and Disclaimers

2019 2020 2019 2020

Loss Ratios SAR 22.2 Bn

GWP and Rankings

1. Bupa Ara bia 12. Al l ianz Saudi

Gross Written Premiums 2. Ta wuniya 13. Sa udi Enaya

3. Medgulf 14. Al l ied Cooperative

4. AXA Coopera tive 15. Wa laa

5. GUCIC 16. Sa lama

2019 21,663 Million 6. Ma l ath 17. Gul f

7. Ama na Insurance 18. Uni ted Cooperative

9. Ara bian Shield 20. Sa udi Re

10. Al Eti had 21. Al Al a miya

11. Al Sa gr Insurance 22. Al i nma Tokio

The Other companies’ makeup remaining 4.78% of the Top 10 Companies

Gross Written Premium – Top 10 Companies

Gross Written Premium – Other Companies

Gross Written Premium – Movement

Net Written Premium – Top 10 Companies

Net Written Premium – Other Companies

Net Written Premium – Movement

Retention Ratios - Top 10 Companies

Retention Ratios - Other Companies

Earned Premium – Top 10 Companies

Earned Premium – Other Companies

Earned Premium – Movement

Net Incurred Claims - Top 10 Companies

Net Incurred Claims - Other Companies

Loss Ratios - Top 10 Companies

Loss Ratios - Other Companies

Combined Ratio 2020

Net UW Profit/(Loss) – Top 10 Companies

Net UW Profit/(Loss)– Other Companies

Net UW Profit/(Loss) – Movement

Bilal Shakir Muhammad Umar Inam Elahi Aisha Ishfaq

Kashmayen Karim Muhammad Maaz Ahmed

We welcome your feedback on the analysis presented in this report.

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