RIYADH, 1 June 2004 — Fire and property insurance premiums in the Kingdom have shot up by 81 percent since 2000, reflecting growing concerns over terrorist attacks.
A source in the Saudi insurance market told Arab News the gross premium in the fire and property insurance categories shot up from SR305.2 million in 2001 to SR554.2 million the following year as part of the terrorism risk, citing statistics issued by the Institute of Banking, a part of the Saudi Arabian Monetary Agency (SAMA).
The source added property insurance rates have been high since the Sept. 11 attacks. “Local insurance companies coordinated with world insurers to restrict an increase of prices to a level acceptable to clients,” he said.
The property insurance market witnessed stable growth last year as terrorist attacks hit the capital in May and November. Small and medium enterprises tend not to go for special cover, since do not consider themselves targets.
“The few international insurance companies providing terrorism cover apply very high rates — double or more the rate applicable to the basic covers for standard insurance policy,” he said.
Meanwhile, Sulaiman Al-Humaid, the chairman of the National Company for Cooperative Insurance (NCCI), has welcomed the decision of the Supreme Economic Council to sell off the Saudi government’s shares in NCCI. The SEC agreed that the shares held by the Public Investment Fund in NCCI should be floated for public subscription.
Al-Humaid said it was an important element of the economic reforms program capable of creating a new investment vehicle for diversifying the income resources of the Kingdom.
He expressed hope that the “usual transparency and clarity will be applied in the privatization process as well.”
