Insurance firms suffer losses due to stiff competition

Updated 24 October 2012

Insurance firms suffer losses due to stiff competition

Experts are stressing the need to take effective steps to regulate the medical and vehicle insurance market as several insurance companies in the Kingdom struggle for survival.
Struggling insurance companies, in a bid to keep their companies afloat, were waging a price war by slashing policy prices to SR 350 in the hopes of attracting customers, reported Al-Eqtisadiah business daily quoting Shoura Council Member Fahd Al-Anazi on Sunday.
“A number of insurance companies have had their capital diminish because they failed to get high enough returns to compensate for their losses,” he said. 
“There were 30 established companies investing SR 100 million, and high establishment and operating costs have caused the erosion of their capital,” said Al-Anazi. 
He suggested a merger as a solution to rescue these companies. 
“A merger is the ideal solution for such companies, because the other option is pumping in more investments, which will only lead to gradual accumulation of their loss,” he said. He also urged the Saudi Arabian Monetary Agency to take urgent steps to rectifying the insurance market issues and encourage companies to merge in a systematic and studied manner. 
He attributed the failure of these companies to their unhealthy practice of lowering premium prices as a means to collect more liquid cash, which in the long term is harmful to a company.
He also feared that the accumulating losses would drive some companies to commit such violations as not fulfilling their commitment to their customers. Furthermore, the general popularity of insurance companies’ shares in the Saudi stock market will pose a threat to investors who may not be aware of the real financial situation of such companies. 
“The price war between insurance companies is clear before us, as some companies are lowering the premium price as a means to attract customers,” said Abdul Aziz Abu Saeed, member of the National Committee for Insurance at the Council of Saudi Chamber of Commerce (CSCC).
Another member of the CSCC, Abdul Aziz Al-Khereiji, said insurance companies were making programs and competitions without first taking time to make proper viability studies. 
“Competition should be present in an open market because it gives customers the freedom to choose which company’s policies they would like to have,” he said.
He warned that competition would lead to good and bad results, though it offers more choices to customers. Depletion in the capital of some companies was one of the negative results of competition, he said.


‘Dare to dream,’ football hero Thierry Henry tells Saudi fans

Footballing great Thierry Henry thrills fans as he signs 10 footballs on stage and tosses them to the audience. (Photo/Supplied)
Updated 21 min 5 sec ago

‘Dare to dream,’ football hero Thierry Henry tells Saudi fans

  • Fans got up close and personal with the former champion during a segment called the lightning round, where Henry had to answer questions in 10 seconds

DHAHRAN: Stepping onto the Tanween stage in front of a sold-out venue full of cheering fans, footballing great Thierry Henry was quick to say how “hyped” he was to meet his Saudi supporters.
As a guest and speaker at Tanween Season, the former Arsenal striker and French international faced a busy schedule on Saturday after arriving at King Abdulaziz Center for World Culture (Ithra) in Dhahran.
First, he had a “meet and greet” with fans, many wearing Arsenal shirts, which was quickly followed by a discussion of the theme for this year’s event, “Play.”
After two young footballers from Riyadh performed a series of tricks that included balancing a football on one leg, then kicking it in the air to land on their backs, Henry said: “I would have broken my back trying to do that. It’s not easy.”
On his second visit to Saudi Arabia — the first was to Riyadh last year — Henry said that he was impressed by this year’s Tanween theme since he had seen firsthand the results of a children’s quality-of-life program at Tanween.
“What I liked most was to see the smiles on the faces of those children when I was walking around the impressive building. Being able to dream is key for me, but seeing how the youngsters were interacting, and how happy they were with their families walking around, was just priceless,” he said.
Growing up, Henry’s father played an important role in his development. The footballer did not miss a beat when answering that his father was his idol. “My dad was the hardest man to please; to put a smile on his face was the hardest thing to do,” he said.
Although the footballer grew up in a “not so great” Paris neighborhood, he considered it an enriching cultural experience. “It was great for me at the time because it allowed me to travel, although I wasn’t really traveling,” he said.
France’s colonial history meant he was exposed to different cultures early in his life.
“If I going upstairs to have couscous, to the second floor to have Senegalese food, or to eat with the Portuguese downstairs, it allowed me to travel, staying where I was,” he explained.
During his talk Henry showed that his Arabic extends to common niceties such as “shukran,” “afwan” and “alsalamau alaikum.”
Having an impact on the English Premier League and his role in Arsenal’s record-breaking era almost two decades ago are more important to him that being considered the world’s best striker, he said. As for his favorite stadium, Henry was quick to choose Highbury.
Offering advice to younger Saudis in the audience, Henry urged them to face their problems calmly and cleverly.
“Don’t run away. Face it and don’t be scared to fail. Come back again, but smarter,” he said.
Fans got up close and personal with the former champion during a segment called the lightning round, where Henry had to answer questions in 10 seconds. That revealed that he has always admired Muhammad Ali as the greatest, Messi is his current favorite football player and winning the World Cup was the most memorable moment in his career.
After the talk, Henry thrilled the crowd — a reminder of his playing days — by tossing 10 footballs to lucky fans who cheered as he left the stage.