The Fifth Saudi Insurance Symposium has outlined the future of the local insurance sector in front of the attendance of 1200 senior officials and those interested in the insurance sector from inside and outside the Kingdom.
The eight panel discussions and deliberations outside the auditorium during the two-day period between the two-day sessions of Riyadh focused on foreign investments, savings, the future of health insurance and the issues of digital transformation, and the role of the actuarial expert in developing the sector, challenges and opportunities for the reinsurance market.
The symposium, which concluded last week in Riyadh under the slogan "Protection and Sustainability", was a qualitative educational platform through serious discussions on enabling the development of the sector and introducing a package of realistic solutions.
- Call to raise the rate of savings incentives
- The entry of new players reinforces insurance innovation
- Health insurance tops the sector by 20 billion riyals
Weak confidence in corporate performance
Revealed d. Said that one of the most important challenges facing the insurance sector is mainly the weakness of confidence in the performance of companies as a result of historical factors and this holds companies responsible for providing more awareness efforts. The importance of insurance and the dissemination of culture and diversification of products, where - and talk to the governor - that 85 percent of the insurance policies concerned vehicles and health insurance only, and this requires further diversification and the provision of new products with efforts to enhance confidence in products. The governor said during the panel discussion, which was chaired by Abdulaziz Al Sudais, Chairman of the General Committee of Insurance Companies On behalf of the return of the Chairman of the Executive Committee of Insurance Companies, the vision of the Kingdom of 2030 is ambitious and its programs and initiatives are supportive of the economic transformation and development programs and we hope that the insurance sector will achieve these aspirations and strengthen the culture of risk management and raising awareness and raising the sector's contribution to GDP, which currently stands at 1.5% In this regard, the importance of developing all systems related to the financial sector. He added: "We look forward to customer satisfaction and provide a high level of quality and speed in resolving complaints in order to create confidence in performance, noting that the Foundation has more than 150 employees and staff focused on their duties to receive complaints and follow-up through the links with financial institutions, banks and insurance companies, Even received At the end of 2018 about 30 thousand complaints related to the insurance sector were mostly resolved. The Governor revealed that SAMA has launched a reconciliation between the client and the insurance companies, which deals with complaints regarding vehicle insurance of less than SR 50,000. The executive regulations and electronic signature of the council and the reconciliation committee were approved by the majority of companies. Procedures of reconciliation.
Foreign investments and savings
The Deputy Governor of the Saudi Arabian Monetary Agency (SAMA), Dr. Fahad Al-Shathri, affirmed in the first session the importance of Vision 2030 initiatives in enhancing the national economy by diversifying sources of income, pointing out that the insurance sector is one of the development sectors targeted by the vision. The entry of foreign companies will contribute to the development of the local insurance market. The entry of new players into the market is expected to lead to the adoption of modern technologies, Especially in insurance products, in addition to increased confidence, and promote the principle of transparency and governance ». Al-Shathri added: "Foreign investment or the entry of branches of foreign insurance companies in the Saudi market will enhance the skills and expertise and develop national cadres because of the competitive environment resulting from these companies entering the market.
On the UAE's experience in attracting foreign insurance companies, Emirates Insurance General Manager Ibrahim Al Zaabi said: "The UAE has a unique experience with foreign insurance companies, which has been the development of the UAE market. Most of these companies have high professional standards that have affected the market. "We now have specialized insurance products in the UAE market, such as expatriate labor insurance and industrial park insurance. These products come as a result of the high level of competition between insurance companies in the local market and the ultimate beneficiary," Al Zaabi said. "I fully agree with what was said at this meeting that the insurance companies," said Hadi Hashisha, chief executive of SCOR Re in the Middle East and North Africa, Foreign investors have enough resources and potential to enrich local markets by introducing modern technology and developing sales technology, such as electronic stores, as well as launching specialized insurance products such as cyber risk insurance. "
Insurance in savings
In the second session of the seminar entitled "The Role of Insurance in Saving", the Director General of Insurance Supervision at the Saudi Arabian Monetary Agency, Abdullah Al-Tuwaijri, attributed the reasons for the low saving rate among Saudis to the absence of incentives for saving, in addition to the low level of awareness of its importance. Vision 2030 has adopted several initiatives, through the launch of the Financial Sector Development Program.
"The third pillar of the financial sector development program is to enable financial planning to support and stimulate demand for savings products, to support innovation, to improve the savings system, to enhance the efficiency of the financial sector," said Altwaijri, And financial education.
"There is no doubt that there is a need to address the reasons for the low savings rate, which is the low level of awareness, lack of discipline or commitment to continue saving," said Mazen Abu Shakra, Gen Re Regional Director for the Middle East, North Africa and Cyprus. The second reason is the most prominent, but there are factors contributing to the low level of savings, such as the dependence of many young people on their families to ensure the minimum standard of living, in addition to the lack of sophisticated products address the youth audience, which accounts for 60% of the population of the Kingdom ».
Nayef Al-Misnad, Executive Director of Wealth Management at NCB, reviewed several models of savings and stressed the need to strengthen the public-private partnership system in adopting important steps towards enhancing awareness of the importance of saving.
The third session was held under the title of "The Actuarial Expert and its Role in the Development of the Insurance Sector", chaired by Johnson Vargas, CEO of Walaa Insurance Company, with Sarwar Jarami, Actuarial Expert at SAMA, Ahmed Al Qureshi, Risk Manager, Actuarial in the Middle East at Melman, as speakers at the session.
The workshop focused on "defining the responsibilities of the actuarial expert by combining understanding and understanding of theories and applications in the sciences of mathematics, statistics, economics and finance, and using this to measure future risks and propose solutions to avoid the resulting problems." The seminar addressed the noticeable improvement In the performance of insurance companies during the years 2016 - 2017 after the start of the role of actuarial experts in the study and estimation of prices and exercise their work in giving directions of financial vision of the company, and their commitment to implement the instructions of the Saudi Arabian Monetary Agency (SAMA) to protect against risks. The researchers concluded the importance of the work and duties of the actuaries in the insurance sector, especially in the field of social health insurance through its role in the application of statistical and mathematical principles for the preparation of tables of contingencies related to risks and deaths, accidents, diseases, disability, unemployment and retirement in order to work to calculate premiums and rates of financial contributions required based on the factors of expenditure Interest rates, age, gender, and client occupation.
The fourth session on the first day dealt with the subject of the Saudi reinsurance market - opportunities and challenges. The session was chaired by Fahad Al Hossani, Chief Executive Officer of Reyad Al Dawaisan, CEO of Kuwait Reinsurance Company, Mr. Mark Cooper, General Representative of Lloyds Middle East, and Naji Al Tamimi, Chief Executive Officer. For the international insurance company Eun Insurance in Saudi Arabia and Bahrain.
There has been a slight improvement in the insurance curve as it does not see a large increase but is slightly inclined to decline in reference to the Gulf markets being affected by global market factors. However, the Gulf market is able to compensate losses in the insurance sector by introducing reinsurance to the region and with good capabilities Short term.
The meeting concluded the fact that there are excellent opportunities in the Saudi market for reinsurance and there are companies seeking to develop and support the industry and economy so it is necessary to work in an integrated way to develop the market, where there is a strong relationship between the insurance market reinsurance and the relationship is strategic and long and there are goals to be achieved through Takatof All parties and specifically the legislative aspect which would work to provide insurance for the performance of insurance and reinsurance companies to achieve market sustainability.
On the second day of the seminar, which began with the fifth session entitled "The Future of Health Insurance", chaired by Ali Al-Subhayeen, Board Member of the Board of Directors of Shadid Re Re-Insurance Company. The speakers included Dr. Shabab Al-Ghamdi, Secretary General of the Saudi Health Insurance Council, CEO of Tawuniya Insurance Company, Member of the Executive Committee and Chairman of the Health Insurance Sub-Committee, and Dr. Khalid Al-Subaie, Chairman of the National Health Committee, Member of Riyadh Chamber Council.
At the beginning of the session, the Chairman of the session presented a number of topics to the participants about the future vision of the health insurance sector in light of the initiatives, economic transformations, legislation and regulations that allow for the development of the sector according to the vision of the Kingdom 2030 through the three axes that constitute the health insurance sector Service providers, insurance companies and supervisory and supervisory bodies.
In this context, the Chairman of the Health Insurance Sub-Committee and the CEO of Al-Tawuniya Insurance Company Abdulaziz Al-Buq reviewed the reality of health insurance in the Kingdom. He pointed out that the sector will see growth in the next ten years at a rate of more than 70% of this year without adding visitors and pilgrims who are expected to Constitute an important segment of the insurance sector in the next phase.
The Chairman of the Health Insurance Sub-Committee pointed to the main factors that will be the main engine for the growth of the Saudi health insurance sector, the first of which is the implementation of the national transformation projects and the vision of the Kingdom 2030, especially the mega projects such as the new and the cash, which will open a large area for the employment of Saudi youth, which will be a great opportunity to be covered by health insurance. The role of the SME sector in providing more than one million jobs in the coming years.
Al-Buq said that the health insurance will include new categories in the list of insured currently, including the categories of Saudi citizens working in the private sector and their dependents, and the visitors of the Kingdom of tourists and Umrah as well as domestic labor and thus contribute to the growth of this sector, pointing out that the population increase at an annual rate of 2.5 The social changes currently taking place in the Kingdom will be an important factor for the growth in the number of health insurance coverage.
He described the health insurance experience in the Kingdom during the last period as successful, with the size of the health insurance sector 20 billion riyals in 2018 and forms 55% of the total size of the insurance market, and the number covered by health insurance under the umbrella of health insurance will reach the end of this year to 12 million Which confirms the importance of this insurance in support of health care plans and the expansion of private health sector investments after the cardholders have become about 85% of the total review in private hospitals.
The participants discussed the role of the Health Insurance Council and its future vision in the development of health insurance performance. General of the Saudi Health Insurance Council, said that the Board's vision and responsibilities are to enhance the value to all parties and to the individual by the three parties in the insurance process by providing health promotion to individuals And to move towards real investment to prevent disease and reduce costs while maintaining the sustainability of health coverage for anyone who is eligible for service to improve performance.
Dr. Al-Ghamdi pointed to the most important initiatives that will be presented by the Health Insurance Council such as the unified claims platform project. The project was launched in 2020 after ensuring technical readiness. Performed by the Board of Guarantee is to achieve transparency and governance. As for the future expectations of health insurance performance, the participants expressed their expectations that the market is promising and there will be growth that will help in creating opportunities for expansion and foreign investors. The participants stressed that the health insurance sector achieved clear growth from 2006 until 2018. The market coverage of the health insurance activity To include 11 million beneficiaries.
The sixth session, entitled "Digital Transformation and its Impact on Services in the Insurance Sector", was moderated by Fawaz Al Hajji, CEO of Malath Insurance Company and member of the Executive Committee and Chairman of the Vehicle Insurance Subcommittee. The meeting was attended by Ziad Al Yousif, General of Sales of Electronic Products at Alam Company, Dr. Mohammed Sulaiman CEO of Najm, and Jan Olsen Technical Director, Hani Al Dahan, Deputy Secretary General of Saudi Commission for Accredited Residents.
The session reviewed the electronic payments hub, where more than 20% of the financial transactions are now being electronically targeted. The insurance sector has been targeted to benefit from these services in order to mitigate the negative effects of fraud and facilitate claims. The company is working to help insurance companies to connect with SADAD as well as a new platform for electronic billing, a platform that aims to reduce the use of cash in payments through electronic billing between the parties and payment, The insurance sector is one of the sectors most in need of this type of technical service and has been developed to integrate with other platforms.
The future of insurance from a global perspective
The seventh session entitled "The Future of Insurance - From a Global Perspective", which was moderated by the CEO of Gulf General Insurance Company and Executive Committee Member Ihab Lengawi. Tal Nazer, CEO of Bupa Arabia and Vice Chairman of the Insurance Executive Committee, expressed his optimism about the future of the Kingdom's insurance sector, which represents a large market of more than 30 companies providing diversified insurance services and products. Saudi Youth.
On the evolution of the insurance sector in the Kingdom, which is the sale of electronic insurance products, Tal said: "Of course this is a significant step imposed by the developments of modern technology, which contributes to improving the level of service, in addition to facilitating procedures for the purchase of insurance.
In his speech at the same session, Dr. Götz Kura, partner at Oliver Wyman, spoke about the premise of Vision 2030 for the insurance industry. "Vision 2030 has developed solutions to address the challenges facing the insurance sector in the Kingdom, To develop a framework for the development of the sector », adding that« insurance is part of the integrated community system, but it is necessary to be responsible for the definition of the sector, through the development of a policy framework and a plan of action ».
Pierre Fernosois, Director of Deloitte London, spoke about the challenges faced by the insurance industry from a global perspective, including climate change and its risks from the economic perspective, technological developments and the risks of cyber attacks. He added: "There is no doubt that these risks cause a state of concern at the level of business, and from this perspective, the relevant bodies to oversee the insurance sector to develop perceptions about the need to keep pace with the changes imposed by the nature of circumstances.
Accounting Standard 17
The meeting discussed the impact of the application of IAS 17 on insurance companies managed by Ammar Halawani, CEO of Arabiya Insurance Company, member of the Executive Committee and Chairman of the Financial Sub-Committee, with the participation of Ibrahim Al Bassam, Executive Partner of Al Bassam & Associates United Accountants, Meeliman Al Sal, and Sergio Gerazim, Partner at PwC Middle East.