Saudi Arabia: Land transport pumps US$80 mln into insurance market yearly
Source: Middle East Insurance Review | Oct 2015
The road transport sector in Saudi Arabia contributes about SAR300 million (US$80 million) to the insurance market each year. The amount covers around 150,000 trucks on the road, said Mr Bandar Al-Jabri, President of the National Committee for Transport of the Council of Saudi Chambers.
Mr Al-Jabri made these comments as he criticised increases in insurance premium rates for motor third-party liability cover, which he said have led to increased costs for land transport companies and ultimately the local consumer, according to a report on the Mubasher news website.
He said that the committee will meet officials of the Ministry of Industry and Trade and the Saudi Arabian Monetary Agency (SAMA) to discuss the hefty insurance premium hikes imposed on taxis and trucks.
Auto insurers have been hiking premiums for several months now to turn around losses in the business, which has been hit by fierce price competition. According to local media reports, third-party liability insurance premiums for taxis have jumped from SAR200 to SAR1,200 this year. Premiums for heavy transport vehicles were hiked from around SAR700 to SAR2,000.
Mr Al-Jabri also said that around seven trucks are stolen every day in Saudi Arabia for the cargo carried by them, reported Arab News. This occurs despite a monitoring system installed in the trucks. Around 70% of the stolen trucks are found intact, while parts of 30% of trucks are stolen, he said.
SAR1 = US$0.27