Saudi Arabia – Insurance capitals down by SAR 2 billions
Monday, 08 28 2017, Category: Insurance and Reinsurance, Country: Saudi Arabia
The number of insurance companies listed in the Saudi market reached 33 companies after the suspension of “Weqaya” company, which was not able to stay due to the accumulation of losses that was very heavy on its finances. Although the high number of insurance companies is expected to create a competitive environment, which helps raise the level of service and attract additional customers, this did not happen in reality. In fact, there was an increasing number of complaints submitted by customers recurrently due to delays in the settlement of claims caused by low liquidity; some companies are weak in marketing and their market shares do not exceed 2%. Moreover, the weakness of capitals created weak companies that are unable to compete. At a time when we expected support to capitals by capital injections in order to face challenges, insurance companies decreased capitals by around SAR 2 billion in order to cover accumulated losses in order not to be affected by new companies’ law.
Source: Al Riyadh Newspaper