JEDDAH, 16 June 2005 — The Saudi Arabian Monetary Agency (SAMA), the Kingdom’s insurance regulator, said it would receive until Dec. 31, 2005 applications for license from foreign insurance companies to open their branches.
SAMA said the government has given three years for foreign insurance companies currently operating in the Kingdom to comply with the country’s new regulations.
“Foreign companies operating in the Kingdom through their Saudi agents would be allowed to continue their operations during the three-year interim period. They will not be asked to make any changes in their activities during this period,” SAMA said.
The foreign companies that are not operating in the Kingdom must inform SAMA of their intent to operate and present applications for license, the added.
SAMA has already completed studies on the applications of 14 insurance companies and sent their files to the Commerce and Industry Ministry to complete the licensing process. The 14 companies, which have been listed on the SAMA website include the Mediterranean & Gulf Insurance & Reinsurance Co. (MedGulf), AXA Cooperative Insurance, Tokio Marine & Nichido, United Cooperative Assurance Co. (UCA) and BUPA Arabia.
Others are: Assurance Saudi Franci, Saudi United Cooperative Insurance (AMITY), Saudi Indian Insurance Company, Al-Ahli Takaful Co., Saudi National Insurance Co., SABB Takaful, Arabian Shield Insurance Co., Al-Rajhi Co. for Cooperative Insurance, and Al-Alamiya Insurance Co.
SAMA’s studies on the applications of 15 companies have reached advanced stages. These companies include American Life Insurance Co. (ALICO), Arabian Company for Cooperative Insurance, Arabian American Insurance Co. (AAICO) and Allied Cooperative Insurance Group.
Others are: Al-Ahlia Insurance Co., Arabia Insurance Cooperative Co., Saudi Arabian Insurance Company, Takaful Taawuni Co., Al-Sagr Co. for Cooperative Insurance, Saudi IAIC for Insurance, Hemayah Cooperative Insurance Co., Gulf Union Insurance Co., Trade Union Insurance Co., ISAR Insurance Co. and Arabia Ace Insurance Co.
In March, the Saudi Arabian General Investment Authority (SAGIA) licensed 13 new insurance companies with a total capital of SR2.5 billion to operate in the Kingdom. According to SAMA, the 13 companies as well as 16 others are currently completing licensing procedures.
The new move comes as part of SAMA’s efforts to regularize the market, which is set to exceed SR15 billion by 2009 as a result of growing demand for medical and car insurance. The market is currently estimated at SR4 billion with car insurance having the largest share of 32 percent, medical insurance 22 percent, property insurance 17 percent and others 29 percent.
According to Ali Abdul Rahman Al-Subaiheen, executive president of the National Company for Cooperative Insurance (NCCI), the only licensed company in the Kingdom, car insurance will grow to SR5 billion and medical insurance to SR6.3 billion within the next four years.
Meanwhile, the Cooperative Health Insurance Council recently approved five companies to provide health insurance service in the Kingdom. The council also authorized 117 health institutions across the country - 40 in Riyadh, 11 in Jeddah, nine in Dammam, 14 in Madinah, and three each in Makkah and Jubail - to implement the scheme from June 1.
