JEDDAH, 15 November 2004 — Car insurance in Saudi Arabia grew by 126 percent last year to SR610 million as a result of the mandatory insurance on driving license imposed by the country two years ago, according to a report published by the Saudi Arabian Monetary Agency.
Medical insurance also rose by 9.8 percent to SR260.9 million while insurance against fire soared to SR232 million and energy insurance by 55 percent to SR119.9 million, the report said, adding that aviation insurance dropped by 8.4 percent to SR137.5 million. The total value of insurance premiums in the Kingdom rose by 16 percent from SR2.6 billion in 2001 to SR3 billion in 2002, SAMA said. There are 104 insurance companies, agents and consultancy offices in the Kingdom with a total of 2,214 workers including 824 Saudis. According to a survey conducted by SAMA, there are 55 insurance firms in Riyadh, 31 in Jeddah and 18 in Dammam.
Car insurance became mandatory on all motorists in the Kingdom from Nov. 20, 2002. Saudi authorities have emphasized that they would not allow anybody to drive without an insurance policy. There are more than five million cars in the Kingdom. Demand for motor insurance has been increasing due to high rate of traffic accidents in the country.
The Kingdom’s insurance market got another boost when the Ministry of Health issued details of a mandatory scheme of medical insurance under the provisions of the Cooperative Health Insurance Law for some seven million expatriates and their families.
Medical insurance is a precondition to obtaining a legal residence permit, and the number of specialized insurance companies will be pre-qualified by the Ministry of Health to provide the medical coverage.