沙特保险：将保柏（Bupa）和塔武尼亚（Tawuniya）评级上调至买入

EquitiesInsurance Upgrade Bupa and Tawuniya to Buy Saudi Arabia ◆Insurance sector has underperformedYTD, aftera strong2024,especially forthe smaller insurance players Ankur Agarwal*, CFASenior Analyst, MENA Consumer, TMT & TransportHSBC Bank Middle East Ltd, UAE branchankurpagarwal@hsbc.com+971 4 423 6558 ◆Insured lives growth to continue, medical inflation likely tomoderate, stabilisation in motor prices Ramesh Pantagolusula*AssociateBangalore ◆Upgrade Bupa to Buy, revise TP to SAR200(from SAR226);raiseTawuniya’s rating to Buy, TP to SAR165(from SAR138) * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations Driversofmoderating medical inflationand increase in insured livesintact: We believetheongoing implementation ofdiagnosis-related groups(DRG),verticalintegration into healthcare services (MEENA by Tawuniya and CareConnect by Bupa)andtheincreased supply of private healthcare will lead to a gradual easing of medicalinflation thatshoulddrive improving profitability for the two largest insurers in themedical segment in Saudi. Bridging the enforcement gap inhealth,continued inflow ofexpats andincreasing privatisation of the healthcare ecosystem will be the medium-termdrivers of insured lives.The introduction of a nationalinsurancepolicy,which isexpectedin 1H2025,couldlead to a growth impetus for insured lives,especially ifthereis afocus on greaterhealthcareprivatisation. Gradual privatisation of healthcare ecosystem is evident:Thecontribution ofprivate health insuranceof theoverallhealthcare spend has increased fromc18% in2018 toc24% in2024,whilethe Ministry ofHealthcarespend has shrunk from 58%to50%in the same period. This increased contribution from private insurancein the lastfew years has been drivenbyan expansion of theshareof privatehealthcare operatorsand policy initiatives like Article 11 (private insurance in public hospitals).Beyond theincremental positive changes in recentyears,any policy changethatexpands the ambitof the insurance net to the public sectorwouldbe a meaningful driver for thesector. Upgrade Tawuniya and Bupa to Buy:As we reflect the strength of Tawuniya’sresults, we raise our target price to SAR165.00and upgradeour rating on the stocktoBuyfrom Hold. As a multi-lineinsurer,the companyhas gained share in both health(71% of the book) and motor in recent years. We also upgradeBupato Buyfrom Hold;we believeits currentvaluation reflects a tough 2024 and a slow startto2025 as theSaudia contract shifted back to Tawuniya in1Q,butfails to acknowledge a 2024-27eearnings CAGR of 15% and average ROE of 26% during the period. Key changes toratings andtarget prices Issuer of report:HSBC Bank Middle East Ltd,UAE branch Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosureappendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:https://www.research.hsbc.com Focus on health in 2025 ◆We believe the health segment may witness policy tailwinds as thenational insurancepolicyisunveiled◆Policy push to address the motor enforcement gap was the driver fortheoutperformance of motor-focusednamesin 2024◆Turn positive on thetwolargest health insurers–Bupa on valuationand track record,and Tawuniya on expected earningsupgrades Investmentsummary 2024saw the outperformance ofmotor insurers and the smaller-health focused namesvs thetwolargest insurers,Bupa and Tawuniya,which together control77.8% of medical premiums.The overall insurance sector and the health-focused names outperformed the healthcare sectorfor the second year in a row amid the gradual implementation of vertical integration by theinsurers, and the roll-out ofdiagnosis-related groups(DRG) in Saudi.Bothchangeshave thepotential to boost the profitability of the health insurance names in Saudi, which also stand tobenefit from a push towards greater privatisation of the healthcare ecosystem. YTD,amid macroconcerns around Saudi, the insurance sector is down17%,while Bupa and Tawuniya are downc19%and c8%. In 2024,theinsurancemarket cap weighted outperformance wasdespite a subdued share priceperformance of Bupa (down 3.5%) and a relatively modest gain for Tawuniya (up 10%). Thesector outperformance was on the back of smaller players, suchasAl Rajhi Takaful (ARCCIAB), Saudi Re (SAUDIRE AB), Medgulf (MEDGULG AB) and Chubb Arabia (CHUBB AB),which (with acombined market cap of USD5.4bn currently) were up 122% on average. However,in terms of contribution to the overall sector earnings andrevenue, Bupa andTawuniya (together57% of revenue and66% ofoverallsectorearnings)continued to dominateand outpace the rest of the sector. Al RajhiTakaful (ARCCI AB,not rated,SAR113.20)was theonly other player with a double-digit (10%) contribution tooverall sector earnings. In1Q 2025,the divergence in earnings trajectory between thetwolargest insurers and thesmaller ones became even more pronou