Insured vehicles in Saudi Arabia account for 50% of total, says official

Adel Al-Issa, official spokesperson for the Saudi insurance sector

Adel Al-Issa, official spokesperson for the Saudi insurance sector, said that the number of insured vehicles does not exceed 50% of total vehicles in the local market, though motor insurance is mandatory.

Al-Issa attributed this to the difference between the 12-month term of insurance policies and the three-year car license, Al-Eqtisadiah newspaper reported.

The motor insurance sector is the second largest industry in Saudi Arabia, accounting for more than 21% of total market size.

Motor insurance premiums exceeded SAR 8 billion, the official added, noting that the total value of paid claims in this sector stood at SAR 5.5 billion, a steep decline from over SAR 9 billion in 2016.

Al-Issa attributed this decline to various reasons, such as the linkage of prices and discounts to clients’ insurance records, adding that technical losses, excluding administrative expenses, improved to 67%.