Page 16 - The Insurance Times December 2024

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Women appeared more concerned
Saudi Arabia's Insurance Market Poised for Transfor- about potential weather disruptions,
mation with 61% indicating they avoid certain

Saudi Arabia's general insurance market is on a trajectory of rapid growth, destinations for this reason, compared
with gross written premiums expected to rise from SAR 68.8 billion ($18.4 to 52% of men. Similarly, baby boomers
billion) in 2024 to SAR 105.3 billion ($28.1 billion) by 2029, reflecting a CAGR (ages 60-78) expressed the highest level
of concern, with 66% less likely to book
of 8.9%. This growth is driven by regulatory reforms, economic diversifica-
travel to destinations vulnerable to se-
tion, and increased consumer awareness of risk management.
vere weather. These findings under-
In 2024 alone, the market is anticipated to expand by 9.4%, supported by score the growing influence of climate
developments in sectors such as motor and health insurance. The risks on travel decisions and the need
government's focus on infrastructure development and public-private part- for tailored travel insurance products to
nerships is also expected to play a significant role in driving market growth. address these evolving concerns.

Weather Risks Reshape among women and baby boomers. Climate Change and Its
More than half of the surveyed popu- Growing Impact on Insur-
Travel and Insurance Deci- lation, especially these demographics,
sions now critically evaluate the likelihood of ance
The increasing prevalence of extreme adverse weather conditions when se- Climate change continues to pose sig-
weather events is reshaping how trav- lecting destinations and planning their nificant challenges to the global insur-
ance industry. According to a report by
elers approach leisure trips and the in- itineraries. S&P Global Market Intelligence, sec-
surance options they consider. A recent The survey, conducted online with over ondary perils such as floods, wildfires,
survey conducted by Aon Affinity re- 2,000 American adults, shed light on and severe storms now account for an
vealed that 56% of Americans are now consumer behavior regarding travel dis- increasing share of catastrophic losses.
less likely to book travel to destinations ruptions and insurance purchases. Key Unlike peak perils like tropical cyclones
prone to severe weather conditions like findings revealed that 80% of respon- and earthquakes, these secondary
hurricanes or blizzards. This represents dents traveled in the past year, with events are more frequent and wide-
a seven percentage-point increase from 60% encountering some form of travel spread, creating a pressing need for
a similar survey conducted in 2019, disruption. Among these disruptions, the industry to reassess its risk man-
highlighting a growing trend of caution 44% were due to weather-related de- agement strategies.
influenced by climate risks. lays, a notable increase from 28% in Between 2017 and 2022, the global
Beth Godlin, President of Aon Affinity 2019. Additionally, 26% of those who reinsurance industry struggled to
Travel Practice, emphasized that cli- purchased travel insurance did so spe- achieve profitability, largely due to the
mate risks are becoming a significant cifically to safeguard against weather- growing financial burden of secondary
factor in travel planning, particularly related or natural disaster disruptions. perils. Events such as Hurricane

The Insurance Times December 2024 15