RIYADH — Insurance companies have doubled their premiums during the past two years following huge losses they suffered as a result of the growing rate of road accidents and the subsequent increase in claims, said Adel Al-Eissa, a spokesman for insurance companies. "More than 1.2 million accidents took place so far this year," Al-Eissa told Okaz/Saudi Gazette, quoting statistics provided by Najm Company. "This is a frightening figure, which will definitely reflect on the revenues of insurance companies," he said. Al-Eissa also pointed out that only 45 percent of cars are insured as the insurance policy is linked to the vehicle registration, or istimara, which is renewed every three years. "Many car owners insure their vehicles for a year and renew the policy only when the istimara expires after three years." He said there are official committees in charge of fixing car insurance premiums. The Saudi Arabian Monetary Agency (SAMA) has instructed insurance companies to charge a reasonable and just price for their services depending upon the quality of their products and services. "If a company suffers losses after one year it has to increase charges," Al-Eissa pointed out. Speaking to Okaz/Saudi Gazette on the sidelines of a career day organized by the executive committee of insurance companies in cooperation with the Institute of Finance, Al-Eissa said the main reason for the losses incurred by insurance companies was the growing rate of road accidents. Al-Essa emphasized the need to enforce traffic regulations to reduce accidents. Abdul Aziz Al-Fareeh, deputy governor of SAMA, said many insurance firms have expressed their worries because of the new regulations issued by the Commerce and Investment Ministry that companies that receive profits less than 50 percent of their capital should be dissolved. "We are in touch with the ministry, which has decided to postpone implementation of the new law for one year," he said. SAMA set out the 2022 strategy two years ago to increase the insurance sector's contribution to the gross domestic product. "The strategy also aims at enhancing public awareness on the importance of taking insurance coverage and its benefits," Al-Fareeh said.
