Saudi insurance market is poised to grow more than 23 percent in the current year on the back of new government policies meant to activate new decisions including property insurance and obligatory medical insurance programs of expatriates and their families, local media said quoting experts. Murad Ziraiqat, an insurance expert, said the new obligatory medical insurance programs of the expatriates will positively affect the insurance growth rate by more than 23 percent in 2015. Giving more details, he said insurance premiums increased by SR30 billion ($8 billion), or more than 23 percent compared to figures of 2013. He said shares of medical and car insurance climbed by 54 percent and 25 percent, respectively, of the overall insurances market in the Kingdom. The rate of claims dropped by 80 percent in 2014 due to the increased rate of the prescribed premiums compared to losses arising from claims. This situation led to profit growth of some companies totaling roughly SR930 million ($248 million) compared to SR1 billion ($266.6 million) in 2013, he said. He admitted that insurance market in the Kingdom is facing a number of challenges, including the rise of claims, low prices compared to risks, reluctance of re-insurance companies to accept reinsurance deals due to increased losses in the last two years, weather changes, and shortage of experienced cadres in the market. The insurance companies sustained losses worth SR1.2 billion ($320 million) in 2013 whereas they registered profits of SR1 billion ($266.6 million) in 2014, he said. Fahad Al-Inizi, Shoura Council member and an insurance expert, stressed the need to implant the culture of insurance for customers. The expert expressed belief that weakness in the insurance culture has created uncertainty that insurance industry is an integral part of man's life and his transactions. Whereas insurance is a marginal industry in the developing markets, it has positive results and good investments in the developed countries, he said. He said the insurance industry at the level of Saudi market is still new due to the delay of the issuance of legislations related to insurance which is not more than 10 years. However, some companies are doing their best to put these legislations into practice, he said. In this context, Abdulhalim Mihaisin, another insurance expert, reaffirmed the necessity of strictly applying insurance by-laws issued by the Saudi Arabian Monetary Agency (SAMA) which, he said, will serve the interests of all concerned parties. He also called for the creation of a cooperation bridge between government regulatory agencies, insurance providers and brokers. Source: Yahoo News
