RIYADH -- The Council of Cooperative Health Insurance (CCHI) has denied reports that members of the same family will not be allowed to have medical insurance in two different companies or that they will be prevented from traveling for this reason.
"There is no truth in these reports. We have not issued any new instructions concerning health insurance policy. We are not the party to ban travel," council's spokesman Yasser Al-Maarick told Al-Riyadh newspaper on Wednesday. He said the recent press reports to this effect were totally untrue.
He said that medical insurance companies are aware of the importance of issuing one insurance policy for employee and his dependents who are entitled to this service. This means that an employee and his wife and children should be on the same insurance policy, he explained. But there is nothing illegal or wrong in having medical insurance from two different companies.
Health insurance premiums in the Saudi market grew by 20 percent last year to reach SR18.96 billion (US$5 billion), accounting for the lion's share of total premiums, according to an analysis by the Argaam business news website of the published financial results of insurance companies in the Kingdom.
The health insurance sector made up 52 percent of total premiums which grew to SR36.37 billion last year. This is the same proportion as in 2014. Overall, gross written premiums in the Saudi insurance market increased by 19 percent last year to SR36.37 billion compared to SR30.48 billion in 2014.
The study showed that three companies, namely Bupa Arabia, the Company for Cooperative Insurance (Tawuniya) and Medgulf, collected 79 percent of the total health insurance premiums in 2015.
Saudi Arabia's insurance market is the second-fastest growing in the Gulf Cooperation Council (GCC) and has good potential for further gains, Moody's Investors Service said in a report.
The report said Saudi Arabia's insurance market had premiums worth $8.1 billion in 2014, the second biggest in the GCC. Saudi Arabia was also the GCC's second-fastest growing insurance market in 2014, with an eight-year Compound Annual Growth Rate (CAGR) of 20.3%. Insurance premiums grew by more than 20% in 2014, helped by premium rate increases in the medical and motor sectors.
The growth of Saudi Arabia's insurance market over the last few years stems from (i) the Saudi Arabian authority making health and motor third-party-motor coverage compulsory; (ii) the increasing awareness of the need to purchase insurance products; (iii) the favourable economic conditions, as shown by a GDP that has doubled since 2006; and (iv) prudent actuarial reserve modelling introduced by the regulator in 2013 which has spurred rates hardening in the medical and motor lines.
While medical and health insurance dominate the Saudi insurance market, Moody's expects other types of cover to gain ground in the coming years. The Saudi population's increasing wealth and greater awareness of the benefits of insurance are likely to fuel this growth.
© The Saudi Gazette 2016
