Rising of insurance policy costs in Saudi Arabia led to the rescue of private companies from the specter of accumulated operating losses, as some companies have succeeded in diverting from absolute losses to operating profit during the current year, and that comes after suffering during the last years of the risk of entering into a deep tunnel of accumulated losses.
Because of high insurance policy costs and improvement of competition climate, the number of companies facing the specter of accumulated losses and the suspension of its shares from trading in the Saudi insurance sector, dropped to only two companies which are the «Weqaya» and «Daam » companies, however some private companies have ceased their operating losses in the past years as «ACIG» company after the company's success in extinguishing the accumulated losses by increasing its the capital, rising the insurance policy, and putting limits of the price war, and that according to the Middle East
In a new move, the Saudi Capital Market Authority approved requests of these companies «Wafa for Insurance», & «Seiko for Insurance» & «Bruges for Insurance» & «International Cooperative Insurance», and «AXA Cooperative» to increase their capital by subtracting the priority rights shares, which means that the loss-making companies shall overcome their losses through this final step.
In this regard, it is expected that some insurance companies in Saudi Arabia during the last quarter of this year will achieve a remarkable increase in the volume of profits, as «Middle East» confirmed that the work at the health insurance policy in accordance with the new prices, entered into the actual application, starting from the beginning of the second half of this year.
These developments come at a time when Saudi insurance companies raised health insurance prices on companies and individuals by 21 per cent, during the current year, as the new health insurance document raised the upper limit of the insurance cover for the insured person to 500 thousand riyals ($ 133.3 thousand) for each year, instead of the previous levels at the value of 250 thousand riyals ($ 66.6 thousand), which led the insurance companies providing health insurance services to raise their prices significantly.
In the same context, the «health insurance» purse controls 53 per cent of the Saudi insurance market, while «vehicle insurance» purse controls 23 per cent of the insurance market in the country, this comes according to the latest statistics published in 2013.
On the other hand, a senior official in one of the insurance companies listed on the Saudi stock market confirmed to «Middle East», yesterday, that the actuary notes on the performance of insurance companies will appear clearly in the lists of the last quarter of this year, also said: «we will see an improvement in results of many companies, however, that the size of this improvement depends ultimately on the market data, and competitiveness ».
These developments come after the «Middle East» explained from informed sources, about three months ago, that the Health Insurance Council's decision to raise insurance health cover 100 per cent starting from the beginning of the second half of this year, is designed to make insurance companies to provide their health services on a larger scale in light of the suffering of some patients with cancer and other diseases with high treatable bills..
The report, which was released earlier last year, that the Saudi market is the second largest in the Middle East, after the UAE insurance market in terms of volume of insurance premiums, which approached the level of $ 5 billion, the report predicted that the Saudi market keeps its location between major markets in the region in the medium term, the report noted that the development of legislative systems, in addition to the application of the mandatory insurance, had an impact in the Saudi market growth.
The report indicated that insurance markets in the Middle East and North Africa, has seen significant growth value in recent years, while the pace of growth slowed during the years 2011 and 2012; because of the expectation of most markets to achieve increases in total gross for less than 5 per cent of this year's premiums, while the moves in total written premiums «JP W.» were more pronounced in countries affected by the Arab Spring, where growth decreased in 2011 with a difficult business conditions in 2012
Because of high insurance policy costs and improvement of competition climate, the number of companies facing the specter of accumulated losses and the suspension of its shares from trading in the Saudi insurance sector, dropped to only two companies which are the «Weqaya» and «Daam » companies, however some private companies have ceased their operating losses in the past years as «ACIG» company after the company's success in extinguishing the accumulated losses by increasing its the capital, rising the insurance policy, and putting limits of the price war, and that according to the Middle East
In a new move, the Saudi Capital Market Authority approved requests of these companies «Wafa for Insurance», & «Seiko for Insurance» & «Bruges for Insurance» & «International Cooperative Insurance», and «AXA Cooperative» to increase their capital by subtracting the priority rights shares, which means that the loss-making companies shall overcome their losses through this final step.
In this regard, it is expected that some insurance companies in Saudi Arabia during the last quarter of this year will achieve a remarkable increase in the volume of profits, as «Middle East» confirmed that the work at the health insurance policy in accordance with the new prices, entered into the actual application, starting from the beginning of the second half of this year.
These developments come at a time when Saudi insurance companies raised health insurance prices on companies and individuals by 21 per cent, during the current year, as the new health insurance document raised the upper limit of the insurance cover for the insured person to 500 thousand riyals ($ 133.3 thousand) for each year, instead of the previous levels at the value of 250 thousand riyals ($ 66.6 thousand), which led the insurance companies providing health insurance services to raise their prices significantly.
In the same context, the «health insurance» purse controls 53 per cent of the Saudi insurance market, while «vehicle insurance» purse controls 23 per cent of the insurance market in the country, this comes according to the latest statistics published in 2013.
On the other hand, a senior official in one of the insurance companies listed on the Saudi stock market confirmed to «Middle East», yesterday, that the actuary notes on the performance of insurance companies will appear clearly in the lists of the last quarter of this year, also said: «we will see an improvement in results of many companies, however, that the size of this improvement depends ultimately on the market data, and competitiveness ».
These developments come after the «Middle East» explained from informed sources, about three months ago, that the Health Insurance Council's decision to raise insurance health cover 100 per cent starting from the beginning of the second half of this year, is designed to make insurance companies to provide their health services on a larger scale in light of the suffering of some patients with cancer and other diseases with high treatable bills..
The report, which was released earlier last year, that the Saudi market is the second largest in the Middle East, after the UAE insurance market in terms of volume of insurance premiums, which approached the level of $ 5 billion, the report predicted that the Saudi market keeps its location between major markets in the region in the medium term, the report noted that the development of legislative systems, in addition to the application of the mandatory insurance, had an impact in the Saudi market growth.
The report indicated that insurance markets in the Middle East and North Africa, has seen significant growth value in recent years, while the pace of growth slowed during the years 2011 and 2012; because of the expectation of most markets to achieve increases in total gross for less than 5 per cent of this year's premiums, while the moves in total written premiums «JP W.» were more pronounced in countries affected by the Arab Spring, where growth decreased in 2011 with a difficult business conditions in 2012