Health Insurance Industry in Saudi Arabia Booming.

Mahmood Rafique, Arab News

MANAMA, 13 November 2007 — Saudi Arabia’s health insurance industry is booming with total number of registered people under the national health insurance scheme rose to 2.64 million, a 33 percent of the target population earmarked by the Council for Cooperative Health Insurance, Saudi Arabia.

The secretary general of the council, Dr. Abdulla bin Ibrahim Al-Sharif, told the global insurance meet in Bahrain that the health insurance industry’s history in Saudi Arabia goes back in 1990’s when a major initiative was announced in 1991.
Now the health insurance in Saudi Arabia, he said, has become a reality with an almost size rising to SR2 billion and this industry would growth with the passage of time.

He added: “Council strongly believes in transparency and predictability in its working as we believe this is an integral part of a clean business.”

“We are open and work together and work closely with our partners to achieve the target objectives,” he further said.

Organized by the Gulf Union Insurance Company on company’s silver jubilee celebrations the conference titled “Corporate Governance through Risk Profiling” has attracted over 300 delegates from across world, making it one of the largest gatherings of experts from insurance and reinsurance industry.

The opening session was also addressed by Rasheed Mohammed Al-Maraj, governor of the Central Bank of Bahrain, who highlighted the salient features of the unprecedented growth of insurance sector and how the CBB would continue to support this vital segment of the economy.

The patronage of the prime minister to this conference and others pertinent to the financial services sector is a prime example of his care and relentless support to the development and continual growth of the sector, as one of the major components of the economy in Bahrain, as well as a reiteration of the role played by Bahrain as a regional hub for such services.

He said: “There is no doubt that convening this conference and the topics of discussions, constitute a great importance not only to this industry, but also to the CBB due to the fact that developing the insurance industry in Bahrain is one of the strategic directives of the CBB in developing the financial services industry in the country.

“Accordingly, CBB was keen to introduce wide-ranging modifications to the insurance sector regulations, including Takaful that is compliant with Islamic Shariah principles since the transfer of the supervisory responsibilities to the CBB in 2002.

Al Maraj added: “The insurance sector has observed great developments in the past few years represented by the notable increase in the number of companies whether in direct insurance or reinsurance, or supporting activities such as brokers, consultants and loss adjustors. Meanwhile, insurance premiums also increased in 2006 by 26 percent to reach BD118 million compared with BD94 million in 2005.”

“With the development of insurance products compliant with Shariah principles, the scopes of insurance companies regional employment has expanded and thus attracted an increasing number of international companies who took Bahrain as a center for their operations, due to the appropriate regulatory and legislative environment,” he said.

“Corporate governance is of special significance at this particular stage, due to the fact that increasing the regional insurance involvement (whether in terms of available opportunities or developing the institutional stature) may not be achieved without implementing the best standards of corporate governance to protect the interests of all parties, including shareholders and policyholders,” the governor of the Central Bank of Bahrain said.