Medical insurance premiums rise 30% with increased demand

Medical insurance premiums rise 30% with increased demand
Updated 11 July 2013

Medical insurance premiums rise 30% with increased demand

Medical insurance premiums rise 30% with increased demand

Investors here say medical insurance premiums have risen by over 30 percent compared to 2012. This has been caused by the Saudi Arabian Monetary Agency (SAMA) forcing the industry to raise prices and an increase in the number of insured workers.
Other reasons include labor laws making it mandatory for private sector firms to cover Saudi employees and their families and the rising cost of medical treatment.
Abu Al-Sauod, an industry expert, said the industry grew between 10 and 15 percent during 2011/2012 because of the rising demand for medical insurance. He expects a further rise this year.
He said the cost of medical treatment has increased by between 25 and 40 percent. “Insurers are compelled to raise prices to compensate for losses incurred in the first quarter of 2013,” said Abu Al-Sauod.
Results in the insurance sector in the first quarter of this year, post-Zakah payment showed losses of SR 8 million, compared to profits of more than SR 185 million in the same period last year.
Tayseer Khalil of Al-Yamama Insurance Broking Company, said premiums have also gone up because of the massive construction projects in the country requiring medical cover for workers.
Essam Muhammad Abu Issa, a member of AON for Risk Services, said that insurance volumes in 2011 amounted to SR 9.7 billion, but medical insurance over the past few years saw significant growth. “This is due to laws and regulations put in place by the Kingdom to make medical insurance obligatory.”
He said this mandatory insurance has increased the burden on the private sector. “Since 2011 premiums have increased by 25 to 35 percent,” he said. Leading insurers have raised prices to compensate for losses incurred in the process, he said.