Health, vehicle insurance rates may rise by 100%

JEDDAH: Almost half of the companies in the insurance sector need to increase premium for health insurance and vehicle cover this year, a member of the insurance committee in the Saudi Council of Chambers has said.
“Like last year, the rates may increase by 100 percent as the companies incurred incurred huge losses in the fourth quarter of 2015,” Sami Al-Ali was quoted as saying by local media on Sunday.
Al-Ali said many companies in the sector are trying to cut costs and calculate fees in a more professional manner by putting the real price of risks and accidents in all insurance portfolios, especially of vehicles.
A spokesman for the insurance companies, Adel, said they have been requested to come up with other insurance products instead of focusing on health products and vehicle insurance.
He said that if mergers occur, it will bring back stability to the sector and help companies to become more specialized. High losses registered last year are due to the approval of technical reserves by the Saudi Arabia Monetary Authority, he said.
Financial data for insurance companies for the year 2015 showed that health insurance manipulated the sector with more than 52 percent of the total insurance fees which reached SR36.37 billion. Health insurance fees increased to SR18.96 billion by the end of 2015, with an increase of SR3.21 billion as compared to the corresponding period in 2014, with a growth rate of 20 percent.
Data confirms that insurance on cars formed more than 29 percent of the total fees in comparison with 26 percent during 2013 and 2014, and fees rose by 32 percent during 2015, to reach at SR10.60 billion. This increase came as a result of raising car insurance by 100 percent during 2015 because of accidents.
Insurance fees in other fields like marine and land freight and engineering reached SR6.80 billion in 2015.