RIYADH — Insurance experts and government officials have discussed several important insurance issues during their participation in the “5th Saudi Insurance Symposium”, which was held in Riyadh under the patronage of the Saudi Arabian Monetary Authority (SAMA) Governor Dr. Ahmed AbdulKarim Al-Kholifey.

During the first panel discussions, participants highlighted the positive impact of foreign Insurance companies’ entry to the Saudi market. Deputy SAMA Governor for Supervision Dr. Fahad Al-Shathri stressed the importance of the Saudi Vision 2030 initiatives which aims to enhance the national economy by diversifying income sources.

“The insurance sector is one of the vital sectors targeted by Vision 2030 as it is an essential supporting sector of the Kingdom’s economic growth. The foreign insurance companies will play an important role to empower the local insurance market. At the same time, the new players’ entry into the local market will help to bring a new technology, enhance the innovation concept to launch new insurance products and enhance the trust, transparency and governance,” Al-Shathri said during his participation in the first panel discussion which was entitled as “The impact of foreign Insurance companies’ entry to the Saudi market”.

“The foreign investments in the insurance market will also enhance the Saudi youth’s work skills and experiences due to the high competitive environment created by the foreign and local insurance companies. At the same time, SAMA played a key role in developing the Saudi youth’s skills through launching several training programs and courses, during the last period, to raise the level of Saudi youth’s readiness to work in the insurance sector,” he added.

On the UAE experience in attracting foreign insurance companies, Director General of UAE Insurance Authority Ebrahim Obaid Al Zaabi said: “The foreign insurance companies made a successful experience in the local insurance market. The foreign companies contributed in developing the UAE market as most of these companies have professional standards that enriched the sector. At the same time, UAE Insurance Authority adopted new system to enhance gradually the control on the insurance firms. This step also developed the governance standards in the insurance sector.”

“This step of allowing foreign insurers to work in UAE has had a positive impact on the overall market. Many small and medium insurance enterprisers would be merged to face the high competition with foreign firms. 23 local insurance companies plan to merge in the upcoming period,” he added.

“We now have specialized insurance products in the UAE market, such as labor insurance and industrial compound insurance. These products come as a result of the high competitiveness of insurance companies in the local market,” Al Zaabi further noted.

In the same panel discussion which was moderated by Hussam Al Kannas - CEO of Al-Etihad Insurance Co. and Chairman of PCR Subcommittee, CEO of SCOR Re MENA Hedi Hachicha said: “I agree with what was said at this panel that the foreign insurance companies have the potential to enrich the local markets by introducing modern technology and developing sales technology, such as e- stores, as well as the launch of specialized insurance products like cyber-risk insurance.”

In the second panel discussion which was entitled as “Insurance role in savings”, General Director of Insurance Control Department in SAMA Abdullah Al Towaijri said: “There is a need to create incentive products to raise the save rate among Saudis. There is also a need to raise the saving culture among citizens. However, the Saudi vision 2030 adopted several initiatives through the Financial Sector Development Program.”

“The Financial Sector Development Program’s third pillar seeks to enable the financial planning to support and stimulate the demand for savings products, support innovation, improve savings and financial education,” he added.

In the same panel, which was moderated by Abdul Rahman Al Obrah, CEO of Al Ahli Takaful and Chairman of P&S Subcommitte, Managing Director MENA and Cyprus - Gen Re Dr. Mazen Abouchakra said: “There is no doubt that there is a need to treat the reasons of the low saving rate, including low level of awareness and the lack of commitment to continue saving which is the most prominent reason led to have a low saving rate. However, there are others factors contributing to the low level of savings, such as the dependence of many Saudi young on their families to ensure the minimum standard of the living cost as well as the lack of sophisticated products to address the Saudi youth, which accounts for 60% of the Kingdom’s population.”

Managing Director and Head of Wealth Management at NCB Capital Naif Al-Mesned discussed, in his participation in the same panel, several models of savings, and he stressed the importance of the need to strengthen the public-private partnership system in adopting important steps to enhance the awareness level on the saving culture. — SG