Factors Critical in Marketing Strategies of Insurance Companies in Saudi Arabia

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LITERATURE REVIEW

Theoretical Framework

The theoretical framework of this research relies on the review of existing and relevant literature present on Saudi Insurance market. The literature review section of this research will study and analyse a number of factors that influence the consumption of insurance in Saudi Arabia. The study will also examine the behaviour of consuming perception among expatriates living in Saudi Arabia.

In this research, the factors influencing the decision of buying insurance in Saudi Arabia have been examined. The research will gain an insight of political, legal, and social factors influencing the behaviour of Saudi customers in terms of buying insurance (Jannadi, 1996, pp. 50).

Insurance and Economic Growth

According to Wasaw and Hill (1986), the insurance market plays a vital role in promoting economic growth. The activities that take place in the insurance market activities act as financial intermediaries (Levine, Loayza & Beck, 2000, pp. 35). These activities also play a vital role in risk transfer. Researchers have also identified the role of the insurance market in indemnification (Douglas and Wildavsky, 1982, pp. 36).

A number of studies have been conducted to analyse the impact of the insurance market activities on the economy (Arena, 2008, pp. 921). It has been found through the research that the activities taking place in the insurance market encourage the accumulation of new capital. The insurance market also plays a vital role in transforming domestic savings into productive investments (Brenner, 2007, pp. 60).

The study on the relationship between insurance market and economic growth also contribute towards improving financial systems. The growth of the insurance market also plays other vital functions. These functions include the promotion of financial stability and the facilitation of trade and commerce. The activities taking place in the insurance market also allow effective management of risks. In an economy, the insurance market contributes towards the allocation of domestic capital.

The Role of Insurance Market in Developing Countries

The insurance market plays a vital role developing economies for instance India and China (Outreville, 1996, pp. 271). These economies are benefitting from their insurance markets. This study aims to analyse the insurance market of Saudi Arabia. In 2004, the insurance industry of Saudi Arabia was liberalised (Miller, 2004, pp. 20). Since 2004, the insurance industry of Saudi Arabia has been growing by leaps and bounds. Nevertheless, the growth of the insurance market of Saudi Arabia is confined. The insurance market of Saudi Arabia is limited to obligatory business issues. The examples of these issues include motor insurance and health insurance (Nasco & Hale, 2009, pp. 230). These kinds of insurances are particularly for expatriates. Motor and health insurances are two lines of businesses that contribute towards as much as 70% of the total gross premium.

A number of studies have been conducted to determine factors that influence the decision of buying insurance in Saudi Arabia. The focus of these studies has been to analyse how diverse factors motivate or demotivate Saudi people in ...