Saudi Arabia Motor Insurance Market By Insurance Type (Third Party Liability, Comprehensive), By Distribution Channel (Agents/Broker, Bank, Online, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

The Saudi Arabia Motor Insurance market was valued at USD 4.05 Billion in 2024 and is expected to grow to USD 5.32 Billion by 2030 with a CAGR of 5.15% during the forecast period. The Saudi Arabia Motor Insurance market is driven by increasing vehicle ownership, due to the country’s growing population and economic development, contributes significantly to the demand for motor insurance. Also, rising awareness about the importance of having insurance coverage for financial protection against accidents and damages is fostering market growth. Government regulations, including mandatory third-party insurance for vehicles, also play a crucial role in expanding the market. Also, the rise of digital platforms for purchasing insurance and the shift towards comprehensive coverage options are fueling market expansion. The demand for higher-quality services, coupled with a growing emphasis on road safety, is expected to continue to drive the market in the coming years.

Key Market Drivers

Rising Vehicle Ownership Across the Region

Rising vehicle ownership across Saudi Arabia is a significant driver of the motor insurance market. As the country’s population continues to grow and urbanization expands, there is a steady increase in the number of vehicles on the road. This trend is further supported by the country's economic development, a growing middle class, and an improving standard of living. With more individuals and families able to afford vehicles, the demand for motor insurance naturally rises, as people seek financial protection against potential accidents, damage, and theft.

In addition to the increasing number of vehicles, the government’s initiatives to enhance infrastructure and promote road safety have also contributed to higher vehicle ownership rates. The ease of access to financing options and vehicle loans has made it simpler for consumers to purchase vehicles, leading to a larger car-owning population. As more vehicles are on the roads, the risk of accidents increases, further boosting the need for comprehensive motor insurance coverage. With these factors in mind, the rising vehicle ownership across Saudi Arabia is expected to remain a key driver in the growth of the motor insurance market. Insurers are increasingly focusing on innovative solutions, competitive pricing, and customer-centric services to meet the growing demand in the market.

Growing Road Accidents

The growing number of road accidents in Saudi Arabia is a significant driver of the motor insurance market. As vehicle ownership continues to rise, the frequency of accidents, ranging from minor collisions to severe crashes, is also increasing. This escalation in road incidents is attributed to factors such as high-speed driving, distracted driving, and varying road conditions, which contribute to the risk of accidents. With the country’s expanding urbanization and infrastructure development, more vehicles are sharing the roads, leading to greater exposure to potential accidents.

This growing concern over road safety has heightened consumer awareness of the importance of motor insurance. As accidents become more frequent, individuals and businesses are increasingly seeking comprehensive insurance coverage to protect against financial losses from damages, injuries, or liability claims. In response, insurance providers are offering diverse products, including third-party liability, comprehensive, and collision insurance, to meet the rising demand for coverage. Also, government initiatives aimed at improving road safety and enforcing stricter traffic regulations are further raising awareness about the need for insurance. These factors, combined with the continued growth in vehicle ownership, are expected to sustain the upward trajectory of the motor insurance market in Saudi Arabia, making it a critical sector for insurers to focus on.

Rapid Urbanization & Rising Economic Growth

Rapid urbanization and rising economic growth in Saudi Arabia are key drivers of the motor insurance market. As a part of this, according to a recent study, as of 2023, the fraction of Saudi Arabia's urban population remained relatively stable at 84.95 percent, with no noteworthy changes from the previous year. Nonetheless, 2023 remains the highest share in Saudi Arabia. As urban areas expand and the population continues to grow, the demand for vehicles has surged. This increased vehicle ownership, particularly in major cities like Riyadh and Jeddah, directly contributes to the need for motor insurance. Urbanization has also led to the development of modern infrastructure and road networks, further facilitating vehicle usage and, consequently, the demand for insurance products.

The country’s rising economic growth has played a pivotal role in enhancing the purchasing power of consumers, allowing more individuals to invest in vehicles. As a part of this, according to a recent study, as of 2023, Saudi Arabia's economy has risen at an average annual rate of 2.6% during the last four years, placing it as Asia-Pacific's eighth largest economy, ahead of Australia.With a growing middle class and increased disposable income, more people can afford cars, driving up the demand for insurance coverage. Also, as the economy diversifies and more businesses emerge, commercial vehicle fleets have also expanded, adding to the demand for insurance services. Urbanization has also encouraged technological advancements, such as the digitalization of insurance platforms, which has made it easier for consumers to purchase and manage their motor insurance policies. This growth in both individual and commercial vehicle insurance is expected to continue as urbanization and economic growth progress, solidifying the motor insurance market as a key sector in Saudi Arabia’s economic landscape.

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Key Market Challenges

 Lack of Awareness Among Consumers

A significant challenge facing the Saudi Arabia motor insurance market is the lack of awareness among consumers about the importance and benefits of insurance coverage. Many individuals still view motor insurance as an unnecessary expense rather than an essential financial protection. This lack of awareness is often attributed to limited knowledge about the types of coverage available, the legal requirements for insurance, and the long-term financial security that motor insurance can provide in case of accidents or damage.

While third-party liability insurance is mandatory by law, many consumers fail to understand the advantages of comprehensive policies that cover a broader range of incidents, including vehicle damage, theft, and personal injury. Also, some consumers are unaware of the consequences of driving without insurance or having inadequate coverage, which could lead to significant financial burdens in case of an accident. This knowledge gap presents a challenge for insurers, who must invest in education and awareness campaigns to highlight the importance of adequate motor insurance coverage. Without proper understanding, consumers may opt for the cheapest or most basic policies, leaving them vulnerable in the event of an accident. To address this challenge, insurers need to offer clearer communication and educational initiatives to help consumers make informed decisions about their motor insurance needs.

Intense Competition Among Key Players

Intense competition among key players is a significant challenge in the Saudi Arabia motor insurance market. As the demand for motor insurance grows due to rising vehicle ownership and economic development, numerous insurance companies are entering the market, leading to fierce price wars and reduced profit margins. With many providers offering similar coverage options, it becomes difficult for insurers to differentiate themselves solely on price, forcing them to focus on customer service, product customization, and innovative solutions.

The competitive pressure often results in reduced premiums, which, while beneficial for consumers, can strain the profitability of insurance companies. This intensifies the challenge of maintaining a balance between offering affordable prices and ensuring financial sustainability. Also, insurers must invest in marketing, technology, and claims management to enhance customer satisfaction and retention, further increasing operational costs. Also, with the introduction of digital platforms and InsurTech, new players are entering the market, disrupting traditional business models. These digital solutions offer convenience and personalized services, adding to the competitive pressure on established players. To overcome this challenge, insurance providers must continuously innovate, improve customer experiences, and adopt efficient technologies to stay competitive in this fast-evolving market.

Key Market Trends

Technological Advancement Across the Region

Technological advancements are transforming the Saudi Arabia motor insurance market, driving significant trends in the industry. The increasing adoption of digital platforms is enabling insurers to offer more convenient, customer-centric services. Consumers can now easily compare, purchase, and manage policies online, reducing the need for in-person visits and enhancing the overall user experience. This shift towards digitalization is streamlining the entire insurance process, making it faster, more transparent, and efficient. Also, the rise of telematics and usage-based insurance (UBI) is gaining traction in the region. Telematics devices installed in vehicles can track driving behavior, allowing insurers to offer personalized policies based on individual driving habits. This not only encourages safer driving but also provides an opportunity for customers to lower premiums based on their driving patterns.

Artificial intelligence (AI) and data analytics are also playing a major role in claims management and fraud detection, helping insurers improve operational efficiency and reduce costs. Machine learning algorithms are increasingly used to assess risk, automate claims processing, and enhance customer service. Overall, technological advancements are reshaping the Saudi motor insurance market, enabling insurers to offer more tailored, efficient, and cost-effective products to meet the evolving needs of consumers.

Rising Adoption of Online Platform

The rising adoption of online platforms is a key trend driving the growth of the Saudi Arabia motor insurance market. As consumers increasingly embrace digital solutions, the demand for online platforms to purchase, compare, and manage motor insurance policies has surged. This shift is largely due to the convenience, speed, and accessibility offered by digital channels. Online platforms allow consumers to easily compare premiums, coverage options, and insurers, helping them make informed decisions without the need to visit offices or interact with agents in person. The growth of mobile apps and websites has also facilitated seamless policy management, such as making claims, renewing policies, or modifying coverage, all from a smartphone or computer. Also, the rise of digital-first insurers, or InsurTech companies, is disrupting the traditional model by offering streamlined, tech-driven services, often at more competitive prices. This trend is expected to continue, further reshaping the motor insurance landscape and making the process more transparent, efficient, and accessible.

Growing Demand for Bundled Policies

The growing demand for bundled policies is a notable trend in the Saudi Arabia motor insurance market. Consumers are increasingly looking for comprehensive insurance packages that combine various types of coverage into a single policy. This trend is driven by the desire for convenience, cost savings, and broader protection. Bundled policies typically combine motor insurance with other types of coverage, such as home insurance, health insurance, or life insurance, offering consumers a more holistic insurance solution.

Insurers are responding to this demand by offering attractive discounts and added benefits for customers who opt for bundled packages. These bundled offerings not only simplify the insurance process but also help consumers manage multiple policies under one plan, reducing paperwork and administrative tasks. Also, as more businesses in Saudi Arabia expand their vehicle fleets, the demand for fleet insurance bundled with other business-related coverage is rising. This trend is also being fueled by the increased focus on financial protection and risk management. Overall, the growing demand for bundled policies is encouraging insurers to diversify their offerings, enhance customer satisfaction, and provide more comprehensive, cost-effective solutions in the competitive market.

Segmental Insights

Distribution Channel Insights

Agents/Brokers dominated the Saudi Arabia Motor Insurance market, playing a pivotal role in connecting consumers with insurers. These intermediaries provide personalized services, guiding customers through the complex insurance options and helping them choose the best policies based on their needs and budget. Brokers have a wide network of insurance providers, enabling them to offer a variety of coverage options. While digital platforms are growing in popularity, agents and brokers remain essential due to their expertise, local knowledge, and ability to offer tailored advice. Their relationships with customers foster trust, which is crucial in the highly competitive motor insurance market.

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Regional Insights

Northern & Central dominated the Saudi Arabia Motor Insurance market, due to their higher population density, economic activity, and vehicle ownership. Cities like Riyadh, the capital, and other key urban areas in these regions have witnessed significant growth in vehicle numbers, driving the demand for motor insurance. As a part of this, according to a recent study, as of 2024, By 2030, Riyadh's population is expected to grow from 7 million in 2022 to 9.6 million, including 4.1 million Saudis and 5.5 million expats. This marks a 38% gain, with a compound annual growth rate of 4.1%. Also, the Central region's economic hub and infrastructure development contribute to a larger consumer base seeking insurance coverage. As these regions continue to expand, they remain the focal point for insurance providers, who tailor their offerings to meet the growing demand for vehicle protection in these areas.

Recent Developments

• In August 2024, Liva Insurance Company and Malath Cooperative Insurance Company signed a non-binding memorandum of intent to discuss a prospective merger. Liva KSA, which is majority, owned by Liva Insurance BSC (c), a subsidiary of Liva Group, offers a range of best-in-class insurance services to consumers throughout the Kingdom of Saudi Arabia, with a gross written premium (GWP) of SAR 522 million (USD 139 million) last year.
• In July 2024, Najm for Insurance Services Company launched a new telematics program aimed at improving road safety in Saudi Arabia. The campaign, which is backed by innovative mobility analytics tools, promotes safe driving practices. Najm has collaborated on the initiative with Cambridge Mobile Telematics (CMT), which is known for its AI-driven DriveWell Fusion platform for mobility analytics, and AiGeNiX, a leader in artificial intelligence-based analytics with a strong presence in Saudi Arabia and regional clients.
• In March 2024, Ejaro, a leading peer-to-peer car rental platform in Saudi Arabia, partnered with Tawuniya, the kingdom's largest insurance business. Tawuniya led Ejaro's Pre-Series A investment round and launched their breakthrough daily motor insurance product, which aligns with Saudi Arabia's Vision 2030 aims of supporting innovation and increasing economic competitiveness. This strategic alliance builds on Ejaro's remarkable performance in the regional peer-to-peer market.

Key Market Players  

• Wataniya Insurance
• Al Rajhi Takaful
• Liva Insurance Company
• Tree Digital Insurance Agency
• Gulf General Cooperative insurance Co
• Salama Cooperative Insurance Company
• Chubb Group Holdings Inc.
• Tawuniya
• The Mediterranean and Gulf Cooperative Insurance and Reinsurance Company
• Aljazira Takaful

Report Scope:

In this report, the Saudi Arabia Motor Insurance Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Saudi Arabia Motor Insurance Market, By Insurance Type:

o   Third Party Liability

o   Comprehensive

• Saudi Arabia Motor Insurance Market, By Distribution Channel:

o   Agents/Brokers

o   Bank

o   Online

o   Others

• Saudi Arabia Motor Insurance Market, By Region:

o   Eastern

o   Western

o   Northern & Central

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Saudi Arabia Motor Insurance Market.

Available Customizations:

Saudi Arabia Motor Insurance Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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