The spokesperson for the media for the insurance sector in Saudi Arabia, Adel Al-Issa, said the vehicle insurance sector is the second largest sector in the Saudi market and accounts for more than 21% of the total market size.
Al-Issa explained that the volume of insurance premiums auto amounted to over eight billion riyals, noting that the volume of claims paid in this sector amounted to 5.5 billion riyals in the same year, in sharp decline compared to 2016, when it was more than nine billion riyals.
He added that “the decrease is due to several factors, in particular the link of prices and discounts to the record customer insurance, which led to a noticeable improvement in traffic behavior of motorists due to the enthusiasm of most of them for the absence of accidents or insurance claims, and this was the ultimate goal of linking prices and discounts provided for record insurance, and led to As a result, the “no administrative fee” technical damage rate improved to 67%, in drop from 82%. in 2016, according to Al-Eqtisadiah newspaper.
Regarding the contribution of the increase in insurance penetration to the reduction of policy expenses, he stated: “Undoubtedly, the increase in insurance coverage in general aims primarily to protect the interests of community members and reduce their financial burdens in case of accidents or illnesses, and also aims to protect their savings and exploit them in other issues. On the other hand, it also offers government agencies the opportunity to focus more on developing legislation and activating supervision. “
He specifies that the number of vehicles insured does not exceed 50%, only of the number of vehicles on the local market, although insurance is mandatory, referring to the difference between the policy period of “12 months” and the license period ” three years”.
He stressed that there is ongoing coordination between government agencies and the insurance industry to further activate insurance, noting that increasing the number of vehicles insured will result in a reduction in the percentage of accident costs and other associated administrative costs, compared to the ” size of vehicle insurance premiums, which leads to a reduction in the loss rate and consequently a reduction in the value of the premiums, which offers a greater opportunity for companies to compete and obtain a larger market share, which is in the interest both customers and commercial companies.
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