Saudi Gazette report JEDDAH — A number of Saudi citizens have complained that their car insurance premiums have increased sharply. Liability insurance, for example, reached SR850 a car from SR350, an increase of 140 percent. People called on SAMA (Saudi Arabian Monetary Agency) to intervene due to its role as a watchdog for insurance companies. Some citizens told Al-Madina that they were not notified about any increase. They blamed a study that had been conducted by insurance companies and based on the financial impact of risk and uncertainty to justify the premium increases. They said the expert who conducted the actuarial study was not familiar with the local market and gave an incorrect recommendation to increase the cost of insurance. Mansour Al-Zahrani, citizen, said prices have not been stable since the Kingdom introduced car insurance. He said: “It is sad citizens are the weakest link and insurance companies tend to overcharge them. “When they want to make money, they just increase prices without any consideration. “The problem here is that the increase in prices is not accompanied by an improvement in the services provided by these companies.” Saleh Al-Amri, owner of an insurance office, said prices increased last year four times. He attributed the reason to the rising costs of blood money paid to victims of car accidents. “In the past, blood money cost SR100,000 for each victim, but now it has increased to SR300,000.” He said that SAMA's decision to study the local insurance market using actuarial experts drove some insurance companies to get experts from abroad who have no experience in the local market. The study aimed to reevaluate insurance market prices and was based on the losses endured by the insurance companies. Al-Amri admitted the sharp premium increases might have resulted from mistakes in the studies. Khaldoun Barakat, head of the insurance committee at the Jeddah Chamber of Commerce and Industry, said prices in the past were not fair for insurance companies as they far surpassed the cost of traffic accidents every year. He pointed out that the competition between insurance companies drove some of them to lower their prices to attract as many customers as possible. He claimed that prices in the past were not based on any study.
