RIYADH — The impact of COVID-19 on the insurance sector in Saudi Arabia and the efforts of sector players to support the national response to the challenges of the pandemic are explored in a new COVID-19 Response Report (CRR) by Oxford Business Group (OBG), produced with Najm Insurance Services.
The CRR provides an in-depth analysis of Saudi Arabia’s response to the coronavirus in an easy-to-navigate and accessible format, focusing on key data and infographics relating to the country’s socio-economic landscape.
The report examines the Kingdom’s robust macroeconomic position before the crisis, looking at how the combination of low public debt, a strong credit rating and high FX reserves enabled it to absorb the initial shock of the pandemic.
It also considers the positive impact that swiftly implemented containment measures had on curbing the spread of the virus, including the rapid rollout of testing procedures, which helped the country to record one of the lowest case-fatality rates in the G20.
Further decisive action from the Ministry of Finance and the Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank, played a major part in reducing fallout from COVID-19 on both the private sector and households.
The CRR provides details of the wide-ranging initiatives introduced, which include stimulus packages totaling SR120bn and a Loan Guarantee Program that enabled banks and insurance companies to relieve SMEs from finance costs associated with the Kafala program.
It also documents the additional steps taken by the insurance industry to support the Kingdom’s fight against the pandemic, which included making a collaborative donation of SR67.7m.
With insurance penetration levels in the country still relatively low, OBG highlights the potential for expansion that the sector offers. It also analyzes the likely drivers of new industry growth, which range from Saudi Arabia’s many mandatory insurance requirements to its growing population and the regional infrastructure pipeline.
License-holders will find a case study detailing the steps Najm Insurance Services took to accelerate its digital services as a way of easing the impact of the virus. There is also coverage of the disruptive role that fintech, and specifically insurtech, are expected to play in the industry going forward.
Andrew Jeffreys, OBG’s CEO, said that while Saudi Arabia has had to contend with both COVID-19 and a decline in global oil prices in recent months, the country was well placed to rebound in 2021.
“Activity is already increasing across several sectors of the national economy, as our report shows, while consumer sentiment has remained largely positive, which bodes well for a swift recovery,” he said.
“We expect momentum to increase in the coming months and the Kingdom to remain focused on its long-term aim of economic diversification, in line with the objectives laid out in Vision 2030.”
Mohammad Al Suliman, CEO at Najm Insurance Services, added that the auto segment was well placed to rally, buoyed by strong sales last year and in the first three months of 2020.
“With digitization integral to the realization of Vision 2030, upgrading our digital services and preparing technology infrastructure and security systems have been our main focus in recent months,” he said.
“This strategy not only aligns us with Saudi Arabia’s digital transformation goals, but has also enabled us to continue meeting our customers’ needs quickly and seamlessly, despite the challenges stemming from COVID-19.”
The CRR forms part of a series of tailored reports, which OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific COVID-19 Economic Impact Assessment articles and interviews.
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