Cooperative Insurance and its developmental role in the Kingdom of Saudi Arabia


October 1, 2015
Cooperative Insurance and its developmental role in the Kingdom of Saudi Arabia
Dr. Abdullah ben Muhammad Al-Razeen

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Issue

The insurance service has become an important sector in both the developed and developingcountries.A well-developed insurance sector supports economic growth by encouraging industrial activities through risk-taking. It also provides security for business and trade sectors by reducing the potential hazards in the commercial activities , and decreases dependence on both domestic and international financial markets funding needed for investment projects as well as reducing the pressure on financial institutions such as banks and other financial institutions. This paper aims at examining the role of cooperative insurance in the Saudi economy and what it would contribute to economic development and growth of the national economy. This paper reviews the importance of the cooperative insurance industry in achieving the national development goals. It also investigates the relationship between insurance development and some economic variables for the period 2005-2013. The results show that there is a strong correlation between total insurance premium, investment and GDP. It is interesting to note that the increase in gross premium positively influence both investment and GDP. The present paper is highly recommended an urgent action to develop the insurance sector, and tighter legislation governing its activities and expand the scope of its services and the quality of productsin line with Shari

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