Takaful - Saudi Arabia: Roads need to improve for auto premiums to fall
Source: Middle East Insurance Review | Jun 2016
Negative factors and bad practices that affect auto insurance premiums need to be eliminated or rectified for motor pricing rates to fall, according to the Chairman of the national committee for automotive dealers of the Council of Saudi Chambers, Mr Faisal Abu Shusha.
He said that it is difficult to compel insurance companies to reduce their prices in light of the high accident rates. He added that the main reasons for the high number of accidents in the Kingdom are bad road infrastructure, bad driving practices, breaking of traffic regulations, lack of speed bumps, and insufficient road signs, reported Al Riyadh newspaper.
Motor premium rates have been rising in the Kingdom in the last two years, with news reports of the latest hikes last month amounting to as much as 70%. Motor third-party liability premiums for land cruisers rose in some areas to an average of SAR1,180 (US$315), almost 70% higher than SAR700 previously.
Mandatory third-party liability premiums in Saudi Arabia are the highest among Arab states, according to a survey by a local newspaper. The premium for a Toyota Camry in Saudi Arabia is SAR1,500 a year compared to SAR770 in Jordan, which ranks as the next most expensive market.
SAR1 = US$0.27