4 Challenges face the Saudi insurance sector
Saturday, 05 02 2015, Category: Insurance and Reinsurance, Country: Saudi Arabia
The president of the National Insurance Committee in Saudi Arabia Mr. Tal Nazer confirmed that there are four big challenges which still face the insurance industry in this important phase of its growth and development.
Mr. Nazer clarified during the 3rd Saudi Insurance Symposium in Riyadh that these challenges translate as follows:
1- Limited size of the health insurance market compared to the population number, the absence of a clear mechanism to ensure compliance whether in health or motor insurance. It is indicated also that some giant companies owned by the government still insure their assets with foreign insurers outside the country. So we expect legislators in forcing compliance by addressing properly the concerned authorities in the country.
2- Illegal practices against the rules of the regulatory authority so the legislator and the regulator have to intervene to ensure appropriate practices are followed.
3- Limited capacity of private sector hospital and the restrictions imposed to investments in this sector whether in the laws of the Council of Cooperative Health Insurance or the ministry of health. Therefore, this created inflationary pressures on health services costs and we do not expect an expansion of the sector in the future years – if the market is not developed – and this is a big challenge facing the insurance sector which represents 52% of the whole insurance market.
4- Legislators and regulators did not encourage non-compulsory insurance products, due to the long waiting period for an insurance product to be approved and the application of the same fees and standards that apply to compulsory insurance products.
Source: Makkah Newspaper