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INSURANCENon-life insurance to expandannually at 18.6% over 2007-12driven by health and motorinsuranceGoing forward, we expect the health insurance market to grow rapidly, buoyed by theGovernment’s decision of mandating employers to provide health insurance for expatriates. Themotor insurance market is also expected to expand, with motor insurance being declaredcompulsory. BMI expects the total non-life insurance sector to expand at 18.6% CAGR in 2007–12, backed by strength in the health and motor insurance sectors, coupled with increased nonlifepenetration. Meanwhile, the life insurance sector is projected to expand at 25.6% CAGR in2007–12 on population growth and expectations of a rise in density (premium per capita) fromUSD3.6 in 2007 to USD10 in 2012.The Tadawul has 21 listed insurance companies, of which six were listed in 2008. Theseinclude: Arabia Insurance Cooperative Co. (paid-up capital of SR200mn); Trade UnionCooperative Insurance Co. (paid-up capital of SR250mn); Al-Sagr Cooperative InsuranceCompany (paid-up capital of SR200mn); Bupa Arabia for Cooperative Insurance Co. (paid-upcapital of SR400mn); Saudi Re for Cooperative Reinsurance Co. (paid-up capital of SR1bn);and United Cooperative Assurance Co. (paid-up capital of SR200mn). Four other insurancecompanies have floated their IPO in April 2009. These include: Al Rajhi Co. for CooperativeInsurance (offering size of SR60mn); Weqaya for Takaful Insurance and Reinsurance Co.(offering size of SR80mn); ACE Arabia Cooperative Insurance Co. (offering size of SR40mn)and AXA Cooperative Insurance (offering size of SR80mn). NCCI continued to hold a dominantposition in KSA’s insurance sector with 0.18% and 16.0% weight by market capitalization on theTadawul and the Tadawul Insurance index respectively, as on 31 December 2008.Exhibit 106: Sector details% wt inindexAvg. NPM (%),1Q-05 – 4Q-08*Avg. RoE (%)2005 – 2008The Company for Co-operative Insurance (Tawuniya) 0.18 23.30 32.71Malath Co-operative Insurance and Reinsurance Co. (Malath) 0.11 (22.70)Mediterranean & Gulf Insurance and Reinsurance (Medgulf) 0.15 N/ASaudi Fransi Co-operative Insurance Co. (Allianz SF) 0.05 (11.35)Islamic Arab Insurance Co. (SALAMA) 0.04 (4.54)Saudi United Cooperative Insurance Co. (Walaa) 0.03 N/AArabian Shield Co-operative Insurance Co. 0.03 N/ASABB Takaful 0.04 (6.32)Sanad Insurance and Reinsurance Co-operative Co. 0.03 N/AThe Saudi Arabian Cooperative Insurance Co. (SAICO) 0.02 N/ASaudi Indian Company for Cooperative Insurance 0.05 (134.41)Gulf Union Co-operative Insurance Co. 0.03 N/AAlahli Takaful Company (ATC) 0.05 (171.73)Al-Ahlia Insurance Co. 0.03 (802.33)Allied Co-operative insurance group (ACIG) 0..02 N/AArabia Insurance Co-operative Co. (AICC) 0.03 N/ATrade Union Co-operative Insurance 0.03 N/AAl-Sagr Cooperative Insurance Co. 0.03 N/AUnited Co-operative Assurance (UCA) 0.08 N/ASaudi Re for Co-operative Reinsurance Co. 0.10 23.30Bupa Arabia for Co-operative Insurance Co. 0.05 (22.70)Source: Bloomberg, Tadawul, Company data:* start periods may differ based on availability of dataMany insurance players postedloss in 2008 due to investmentlosses and high operationalcosts resulting from inceptionSince the Saudi insurance market is still evolving, majority of the players registered losses in2008 except NCCI, Arabian Shield Co-operative Insurance Co., Gulf Union Co-operativeInsurance Co., and Al-Sagr Cooperative Insurance Co., which posted profits. NCCI has beenable to maintain profitability due to its dominant position in growing insurance segments such asmotor insurance and health insurance. However, NCCI posted negative profitability in 4Q-08JUNE 2009SAUDI ARABIA FACTBOOK71