A new mandatory vehicle insurance system is to be implemented within a few days. The insurance is to be the exclusive property of the National Company for Cooperative Insurance (NCCI) — the sole insurance company authorized to sell the policies in the Kingdom. In other words, NCCI will dominate and monopolize the market — with no competition whatsoever. In the past we tried allowing one firm to control the market only to drop the idea after finding that no good comes from a monopoly.
Trying to swallow a large chunk of food may choke you. People bloated from overeating become too lazy to do anything and end up having others doing everything for them. At the end of the day, however, they sit down to count their income for that day.
Our insurance business will be a multibillion-riyal one, given that there are some three million people with driving licenses in the Kingdom. Some SR1.5 billion annually will flow into the vehicle insurance market. Policies begin from SR300 for a private car to SR1,000 for trucks and other heavy equipment. Why then is only one company controlling the entire market? Are there any guarantees that the monopoly will not lead to slackness which will, in turn, compromise the service.
Since we are talking about insurance requiring the involvement of all parties, the new system’s implementation should be accompanied by the strict enforcement of traffic and safety rules in order to curb violators. Concerns have already been expressed that implementing the system may lead to an increase in reckless and unrestrained driving, which means more fatal accidents on our streets since there will be someone who pays.
Arab News From the Local Press 17 November 2002
