The largest insurer in one of the world’s largest Shariah compliant insurance markets has secured a nod from the regulator to set up an entity to invest specifically in insurtech and healthtech, potentially unlocking Takatech opportunities in Saudi Arabia as the Kingdom soldiers on with a nationwide digital transformation program supported by Vision 2030.
Bupa Arabia for Cooperative Insurance confirmed in a bourse filing that the Saudi Central Bank (SAMA) has given its non-objection for the insurer to set up Bupa Arabia Ventures, a one-person limited liability company (LLC), to be wholly owned by Bupa Arabia, to participate and invest in insurance and healthcare technology.
No further details about the ventures were revealed; however, this move from Bupa Arabia, which holds almost 30% of the Saudi Shariah compliant cooperative sector, underscores the immense potential for the digitalization of insurance and healthcare.
Fintech Saudi, a SAMA initiative, noted in a report in collaboration with Deloitte last quarter several market gaps which present as potential commercial opportunities for insurtech. For instance, Saudi insurance spending per capita was a fraction of the SAR13,612 (US$3,624.80) per capita spend in the OECD at SAR1,107 (US$294.79), signifying opportunity for further expansion.
Operating in a highly competitive market monopolized by a handful, insurance companies in Saudi face significant profit pressure amid complaints of poor customer experience and inability to adapt fast enough to a changing digital world. These have opened opportunities for services such as digital insurance providers, pay-as-you-go insurance, insurance comparison and aggregator sites, peer-to-peer insurance, as well as for automation and data analytics, observed Fintech Saudi. Bupa Arabia, part of the global Bupa Group, is no stranger to digitalization. Just last month, it launched a telehealth platform and its international counterparts from the UK to Australia have been pushing to integrate digital initiatives to expand their market share.