Saudi Arabia: Insurers want annual motor licensing and insurance renewal links
Source: Middle East Insurance Review | Jun 2017
Insurers are asking the authorities to link the renewal of motor licences with insurance renewals on an annual basis to reduce motor insurance losses.
Currently, motor licences are renewed every three years, while motor insurance policies are renewed annually, said Mr Adel Abdulaziz Al-Essa, spokesman for the insurance industry.
He said that the different renewal timings leads to higher insurance losses and thus motor premiums, reports Al Riyadh.
The current motor licence renewal practice may also explain why an estimated 55% of the vehicles plying in Saudi Arabia lack mandatory third-party liability insurance.
Meanwhile, costs are expected to rise further for insurers as the Ministry of Health has directed hospitals to make insurers pay for the treatment costs of victims of accidents to reduce the burden on the state.
At the same time, with effect from 1 April, insurers are required to provide no-claim policyholders with a discount when pricing individual mandatory motor insurance policies as per SAMA’s instructions.
This discount is calculated based on the number of years a policyholder has not made a claim. The discount is as high as 30% in cases where no claims have been made for three consecutive years. M