Macroeconomic Factors and Insurance Growth in Saudi Arabia

Abstract

This dissertation examines the impact of key macroeconomic factors on the growth of the insurance sector in Saudi Arabia between 2016 and 2024. The analysis employs an Ordinary Least Squares (OLS) regression model to explore the relationships between the Insurance Index and variables such as Gross Domestic Product (GDP), Tadawul All Share Index (TASI), oil prices, Saudi Arabian Interbank Offered Rate (SAIBOR), inflation rate, unemployment rate, and net earned premiums. The findings reveal a significant negative relationship between GDP and insurance sector growth, which contrasts with expectations established by existing literature. The study also identifies a positive and significant correlation between TASI and the performance of the insurance sector. However, oil prices, interest rates, unemployment rates, and net earned premiums showed less direct impact. The results highlight the complex interplay between macroeconomic variables and the insurance sector, providing valuable insights for policymakers, investors, and industry stakeholders in Saudi Arabia.