Several insurance companies have raised their health insurance premiums by five percent recently. Officials at some insurance companies cited the higher cost of services as the main reason for the hikes. According to Majed Al-Ghamdi, sales manager at Amana Al-Khaleej Insurance Company, the increase became effective at the beginning of 2008. He says it was an inevitable outcome of the higher costs of health services, which have increased by as much as 20 percent in some cases. “It is likely that health insurance premiums will be raised considerably in the coming period, due to the rising cost of insurance for individuals,” he said. “Therefore, insurance companies are seeking to insure in groups to avoid losses.” Ghamdi also attributed the higher insurance rates to the streamlining of the insurance market and the screening of existing insurance companies. “The companies currently operating in the market are strictly those recognized by the Saudi Arabian Monetary Agency,” he said. Faisal Al-Zeidan, director general of Risk Protection for Insurance Brokerage, said that insurance companies did not vet patients' bills sent from hospitals in the past, whereas these companies are now engaging physicians to review bills and treatment costs and call for slashing them down. “This creates pressure on the part of insurance companies on hospitals to lower the bills”, he said. Ahmad Abou-Aheimad, director of Al-Riyadh Dispensary, says the higher salaries of physicians, nurses and technicians have caused an inevitable increase in costs. “Some hospitals are unable to raise prices because of their commitment to contracts with insurance companies,” he said, “and these companies are looking for cheaper hospitals, which is bad the larger ones.” Tawfiq Abdulmoghni, executive manager of Dallah Hospital, said insurance companies are always on the lookout for higher profit margins. When the compulsory insurance system is implemented, he added, the profits of insurance companies will be pumped up even higher. “Hospitals have raised prices because of a shortage of workers in the health sector,” he said, “and also because of the fierce competition by the Ministry of Health, which is seeking to recruit overseas physicians at competitive salaries.” “There is also the fact that the number of graduates of medical colleges falls short of satisfying the requirements of Saudi hospitals, even 40 years from now,” he said. Statistics show that about SR30 billion is invested in health insurance and related sectors each year, and that about 7,000 new job opportunities are created annually in insurance. __
