SICO Perceives Strong Outlook for Major Players in Saudi Insurance Market

In the short-term, SICO perceives a positive outlook for the insurance market. Insurers in the healthcare sector should expect a temporary boost to their earnings owing to lower claims in 2Q20 as a result of less frequent hospital visits due to the coronavirus lockdown. As the lockdown eases, SICO estimates that more than 80% of those deferred claims will spill over to the second half of the year. Both Bupa Arabia and Tawuniya have booked higher claims in the first half of the year to future earnings volatility, contrary to industry trends. Insurers in the motor sector should not expect higher claims on the back of the lower claims during lockdown. These benefits, however, will boost earnings, although they might be partially offset by the two months premium waiver offered by the insurers. This is the view of a recent report published by SICO Research, a division of Bahrain-based regional asset manager, broker and investment bank SICO BSC (c).

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