Saudi Gazette report JEDDAH — Insurance companies have not been able to unify their base policy prices which continue to vary from one company to another despite a decision by the Saudi Arabian Monetary Agency (SAMA) to establish a minimum price, a local daily reported Tuesday quoting industry sources. “The prices of the insurance policies continued to vary in complete disregard to SAMA's decision” Taysir Abdul Raheem, CEO of Al-Yamamah Insurance Company, said. He told a business daily that manipulating the prices will cause economic losses to the companies themselves, lowering their returns and profits and will also adversely affect the quality of services provided to the end users. Taysir said the insurance companies should bear the responsibility of the great variances in prices especially since they are joint stock companies owned by shareholders. Majed Al-Muwashir, an insurance expert, said people have a negative view about the insurance companies, considering them to be greedy and dishonest. “You can think of any bad picture that comes to your mind about the insurance companies and you will not be far from the truth,” he said. Al-Muwashir made it clear that it is the insurance policy alone which is the decisive factor determining the amount of the insurance compensation. “No company will pay any premium which is not clearly stipulated in the insurance policy. No company will also refuse to pay the premiums which are covered by the insurance policy,” he said. The expert asked policy holders to understand the mechanism of compensation in each policy. “The comprehensive insurance of cars cannot be considered similar to the compulsory insurance, which only covers the rights of the third parties,” he said. Al-Muwashir pointed out that the differences in insurance coverage in each policy are behind variations in compensation. He explained that some companies cover traffic accidents resulting from speeding while others do not. “There is no common coverage. Each company has limits for its coverage and will endeavor to market this difference in its favor,” he said. He regretted that some companies reduced the amounts of financial compensation paid to the victims and said this issue was tabled before SAMA and the Medical Insurance Board appointed by the government to look after the insurance market. “On many occasions the policy holders would accept whatever the insurance companies offer them only to avoid entering into bargaining, which usually ends in favor of the companies,” he said. Al-Muwashir noted that the price war has adversely affected the quality of services being provided to the customers and said this price war has also caused immense financial losses to the companies. “The losses have affected the ability of the companies to pay compensation. Several people are now calling for merger between the insurance companies to augment their financial prowess, thus making them able to pay adequate compensation,” he said.
