Saudis not insuring homes despite floods

Few Saudis are insuring their homes despite the recent floods and the relatively low-cost SR 5,000 annual premium per house on average. Sami Al-Ali, a member of the National Insurance Committee at the Council of Saudi Chambers, said the floods had not increased demand for housing insurance. Sheikh Khaldoun Barakat, chairman of the board of directors of Arab Reinsurance Company, told Arab News that Saudis only worry about insurance when they feel they are in danger. Even though demand was not that high, it was still the right of insurance firms to raise premiums to cover losses. He said current prices are “reasonable” and based on a house’s location, preparations to avoid risk and other factors. Barakat said companies and shops need to have insurance because there is a high risk of heavy losses if an accident or disaster occurs. He said homeowners and businesspeople in Saudi Arabia “are unaware of the importance of insurance against disasters.” Insurance experts said that government and the private sector should raise awareness of the importance of housing insurance. Adnan Khoja, an insurance consultant at Al-Mamoon Insurance Brokers and a former member of the insurance committee at the Jeddah Chamber of Commerce and Industry, said the government does not have a database on the losses incurred by those who do not have housing insurance. He said only relatively wealthy families buy housing insurance. “Over the past three years, companies increased the cost of insurance on vehicles and medical care because of the natural disasters we had across the Kingdom. Despite this, housing insurance has not become a major concern.” Khoja said he would like to see actuarial experts study the losses and profits of the housing insurance sector like the Saudi Arabian Monetary Agency did recently for vehicle and medical insurance. He said the SAMA should also issue new regulations for the housing sector. “Local companies are following the prices imposed by foreign companies worldwide in terms of housing insurance.” Source: ArabNews