The Saudi Arabian Monetary Agency (SAMA) monitors and supervises all financial institutions licensed to operate in the Kingdom. Insurance companies fall under these institutions but despite the fact that SAMA articles on customer protection require insurance companies to follow and abide by set prices of premiums, most companies ignore such articles and continue to exploit motorists and raise insurance premiums, sometimes by as much 100 percent, Al-Riyadh daily reported. Saeed Al-Shehrani, a car dealership owner, questioned the rule that requires a vehicle owner to renew his insurance contract every time he wishes to transfer ownership. “This is a clear exploitation. This decision was issued by the Traffic Department and it serves the interests of insurance companies and car dealerships. Around 400 vehicles are sold daily in showrooms and this means that insurance companies earn SR440,000 daily,” Al-Shehrani said. Customers also complain that insurance companies' services are not commensurate with the substantial profits they earn. Insurance companies are known to delay payment of claims and reimbursements when the amounts of claims are high, he added.
Objections and complaints Adel Khojali works for a car dealership. He says customers complain on a daily basis about high insurance premiums, describing them as unjustifiable. He called for unifying premium rates and ending the exploitation of motorists, stressing the importance of monitoring the activities of insurance companies so they don't increase premiums at will without permission from the relevant overseeing body. Abu Faris, a car salesman, said authorities should explain the reasons behind high insurance premiums and how insurance companies ended up controlling market rates. “A number of car dealers have filed a complaint with SAMA and called for putting an end to the exploitation of consumers at the hands of insurance companies. However, no action has been taken so far,” he said. Most citizens Al-Riyadh daily spoke with said the only solution to end the problem was for SAMA to unify the insurance premium rates and impose penalties on violators, suspend their business activities and confiscate their licenses. A number of car dealership owners said they are planning to lodge official complaints with the concerned authorities, demanding that insurance premiums rates be regulated and unified. Some insurance companies have tied the increase of insurance premiums to the rising prices of car spare parts. An employee of an insurance company who requested anonymity said third party car insurance can reach SR1,250, but most premiums start at SR835. “A group of residents in a governorate in Riyadh Province filed several complaints demanding premium rates should be reduced and insurance companies did bring prices down as they had no choice but to listen to the people's demands,” he said. Several studies conducted by insurance experts estimated that the volume of insurance would increase five-fold over the next five years and this means a larger demand for insurance services. Companies will have to provide more comprehensive coverage and consequently, insurance rates are expected to increase. In the Kingdom, there are 35 SAMA-licensed insurance companies, 78 licensed insurance agents, 76 licensed insurance mediators, 8 insurance consultancy companies, 10 companies specialized in insurance claims and 14 companies specialized in assessing damage and loss.
