SAUDI ARABIAN INSURANCE REMAINS PROFITABLE, SAYS S&P

Domestic insurers in the Kingdom of Saudi Arabia (KSA) have remained profitable despite increasing competition and low interest rates, according to a report from rating agency Standard & Poor's. The agency noted that, compared with their Western Market counterparts, Saudi insurers "tend to focus more on achieving a return on equity through underwriting alone". Investment strategies were conservative, "and contribute little to the industry's overall good profitability". However, S&P anticipated that insurers would find it hard to maintain margins as competition increased. There are currently 33 insurers in a small but growing market. However, S&P noted that because of strict regulation by the Saudi Arabian Monetary Agency, there were high barriers to entry, which somewhat reduced the competitive pressures.