RIYADH: Saudi motorists are behaving better on the Kingdom’s roads thanks to reforms to the insurance market, according to a spokesman for the sector.
Adel Al-Eisa says the value of payouts to drivers has dropped from more than SR9 billion ($2.4 billion) in 2016 to SR5.5 billion.
He attributes the fall to linking prices and discounts to the customer’s insurance record, which helped improve the technical losses rate “without administrative expenses” to 67 percent, down from 82 percent in 2016.
Al-Eisa revealed the figures in an interview with Aleqtisadiah, in which he also said just 50 percent of Saudi vehicles are insured despite it being mandatory, according to a spokesman for the insurance sector.
The increase in the number of insured vehicles will lead to a reduction in the percentage of accident costs and other associated administrative costs, compared to the size of the insurance premiums for vehicles, he said.
This would reduce loss, giving a greater opportunity for companies to compete and obtain a larger market share, which is in the interest of customers and commercial companies alike, he added.
The vehicle insurance sector is the second largest sector in the Kingdom, with more than 21 percent of the total market size, according to Al-Eisa.