JEDDAH, 23 January 2008 — Health insurance companies, which are proliferating across Saudi Arabia, should compete not in terms of price but quality of service.
This was the message given by a team of experts while participating in a discussion on the “Saudi insurance industry; its obstacles and limitations,” in the conclusion of the two-day Saudi International Banking & Investment Conference at the Jeddah Hilton yesterday.
Dr. Abdullah Al-Sharif, secretary general of the Council of Cooperative Health Insurance, said the insurance industry is in its nascent form and a new one for all stakeholders. “The industry suffers from a lack of data, public awareness and manpower. However, with a strong political will and commitment, the challenges facing the industry can be surmounted.”
Ahmed A. Al-Shalan, vice president marketing and sales, Tawunia (NCCI), called for the health care industry to be further streamlined so that the insurance sector can follow suit. “Competition is part of each industry and thus each insurance company wants to have a better share of the market. In a bid to maintain its share, there is a tendency on the part of each company to reduce price, which in turn reduces its profitability,” he said.
Speakers pointed out that since 18 insurance companies have been licensed and at least 14 more are in the pipeline, there should be an insurance awareness plan among the operators. Dr. Fahad Y. Al-Etany, World Trade Organization chief economist in the Kingdom and a business consultant for XS Conferences and Exhibitions which organized the SIBIC 2008, summed up the recommendations of the conference, saying that banks and insurance companies as well as real estate and investment firms should show a greater realization of the concept of corporate social responsibility, and a specialized company should be formed to classify risks and rank credit and banking companies.
The conference called for unifying the Shariah boards existing in various insurance companies into a single specialized body under the Saudi Arabian Monetary Agency for supervision and monitoring.