Insurance firms hike premiums

In a move aimed at making up for losses, Saudi insurance companies have hiked their premiums by 10.4 percent on health insurance and 9.3 percent on vehicle insurance.
Experts blame the losses on unhealthy competition among insurance companies and poor supervision by authorities.
A manager at Tawunia Company for Insurance Consultation Ltd, however, assured that there would not be another hike of 10 percent in premium next year. He did not deny the existence of unhealthy competition in the insurance market and poor technical performance of some companies particularly for vehicle insurance and health which led to some of them losing about 50 percent of their capital.
Stating that SAMA, which regulates insurance activities in the country, directed some insurance companies to fix their premiums on the basis of recommendations of credible actuaries, he said premiums of mandatory insurance products such as health and vehicle insurances have been hiked at varying rates.
The insurance market in the Kingdom is rapidly growing and keeping pace with its fast economic progress, and so insurance companies need to wait for some time to adapt to them and stabilize their premiums. “This is the reason for the perception that the increase in premium pricing has not been systematic,” he said.
“Blood money has been increased from SR100,000 to SR300,000, which, in turn, will affect the motor insurance and there is also talk about Health Insurance Council making amendments to the charter of insurance which may lead to higher health insurance premium,” he said.
Insurance and re-insurance consultant Adham Jad said some companies raised their premiums by 10 percent because of some flaws in their technical performance resulting from a lack of administrative expertise in supervising those companies.
He also believes that the Health Insurance Council was not technically qualified to monitor the services and premiums of insurance companies.