SAML is primarily used for exchanging authentication and authorization data between an identity provider and a service provider. This mechanism is crucial for enabling Single Sign-On (SSO), which allows users to access multiple services with one set of login credentials without repeatedly authenticating. SAML helps in streamlining the login process and enhancing security by reducing the number of times a user has to authenticate. Permissions management and key management are not directly related to SAML's primary function, which focuses on authentication and authorization assertions.