In a workshop organized by the Asharqia Chamber
Prices of spare parts, repair fees, and malpractices raise vehicle insurance rates
The Asharqia Chamber, represented by the Finance Committee, held a workshop that reviewed the vehicle insurance pricing mechanism, in which the head of the technical department at Al-Saqr Cooperative Insurance Company, Dalal Al-Burhan, spoke on Monday evening, February 27, 2023, at the headquarters.
Al-Burhan said during the workshop, which was moderated by a member of the committee, Bandar Al-Suhaimi, that the pricing of the vehicle insurance policy, in both its compulsory and comprehensive types, depends on several factors, according to the instructions of the Central Bank and actuarial studies, which are considered one of the branches in which risks are determined in the field of financing and insurance, through the use of statistics. And mathematical methods in addition to developing solutions to reduce the possibility of undesirable events occurring, and reduce the negative consequences of these events when they occur, according to the study and analysis of the portfolio of each product separately.
Regarding the main reasons for raising vehicle insurance prices, Al-Burhan said that this is due to the significant increase in the prices of spare parts globally, the costs of repair wages, and the existence of some bad practices that are reflected in insurance, such as fraudulent practices, and failure to follow traffic safety controls, which caused a large number of accidents, in addition to the use of Vehicles for purposes inconsistent with the agreed insurance policy, and road infrastructure, especially areas that are a place of recurrence of accidents.
She also referred to some proposed solutions to avoid such increases, such as increasing the awareness of individuals and companies, ensuring traffic safety controls, and intensifying awareness campaigns from all concerned parties. The cash payment contained in the updated mandatory insurance policy, with the Central Bank, keen to monitor the prices of the insurance sector and classify workshops affiliated with insurance companies to be workshops organized by the Saudi Commission (SASO), in addition to stimulating the uninsured segment of society, which constitutes approximately 50% of the Kingdom, to insure Their vehicles to preserve the rights of the party affected by accidents, according to 2021 statistics.
