Renewal of price wars between Saudi insurers
Tuesday, 11 10 2015, Category: Insurance and Reinsurance, Country: Saudi Arabia
There is a renewal of the scenario of “price wars” between Saudi insurance companies in the health insurance field due to the significant decrease in the price of the individual policy related to cooperative health insurance. This translates into large decreases in the individual policies’ prices (especially classes C and D). The fourth quarter of year 2015 witnessed increased competition between these companies in order to attract the largest share of expatriate business where the lowest possible price is sought. Companies are thus exposing themselves to risks in order to achieve the material profit requested by the board of directors for the current year although they are totally aware that any losses will reflect in the financial results of the following year.
The current competition follows by 3 years the price war that happened between Saudi insurance companies in the health and motor lines in the last quarter of year 2012 which caused huge losses for these companies and which affected negatively their solvency. Subsequently the Saudi Arabian Monetary Agency intervened to protect this important industry and find again the balance in the market.
Source: Al Jazirah