Motor premium increases could ease this year, depending on the financial results of insurers for the year ended 31 December 2015, said a spokesman for insurance companies, Mr Adel Abdulaziz Al-Essa.
His comments came amidst complaints from businesses that auto insurance premiums for commercial vehicles have jumped by 100% since 1 January.
Mr Al-Essa explained that the high auto insurance rates is because of the high loss ratios in recent years, in turn due to a significant increase in the number of accidents and compensation costs.
Mr Bandar Al-Jabri, Chairman of the Road Transport Committee with the East Chamber of Commerce, said that insurers have notified transport companies about the increased premiums for comprehensive and compulsory third-party motor insurance, reported the Al Riyadh news website. He indicated that the premium for comprehensive auto insurance has risen from 3.5% of the value of the vehicle to 7%, while the average premium for compulsory third party insurance has increased from SAR1,200 (US$320) to SAR2,500.
Mr Al-Jabri added that road transport companies in the Eastern Province are forming a committee to negotiate pricing with insurance companies.
Motor third-party liability premiums averaged SAR590 in 2014, rising to about SAR850 at the beginning of last year, then to SAR950-SAR1,200 until the beginning of the fourth quarter of 2015, when they settled at between SAR1,400 and SAR1,800.
Total auto insurance premiums in Saudi Arabia could reach SAR10.5 billion (US$2.8 billion) in 2015, a growth of more than 30% compared to 2014, said Mr Abdul Aziz Abu Saud, Deputy Chairman of the Cooperative Insurance Council of Saudi Chambers, reported the Argaam business publication.
SAR1 = US$0.27