Speech by:
H.E. Dr. Fahad Abdullah Almubarak
Governor of SAMA
to
The Second Saudi Insurance Conference held
during the period 16-17/4/1434H (26-27/2/2013G)
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Dear Audience,
It gives me great pleasure to be with you at this meeting held by insurance companies in the Kingdom, represented by the Training and Guidance Committee in co-operation with the Institute of Banking. I hope that such mutual co-operation would result in achieving the goals anticipated from the insurance sector for serving the country and its citizens.
Dear Audience,
The insurance activity has started at the beginning of the fifties of the past century and its actual commencement was ten years ago following the issuance of the Co-operative Insurance Companies Control Law. Since then, the insurance sector has witnessed quantum leap in terms of the development of abilities, capabilities and technical expertise of insurance companies. Awareness of the importance of insurance and its benefits has also risen, and its importance has increased due to its main and vital role in all industrial and commercial fields and sectors. The insurance sector is considered one of the promising sectors in the domestic economy, with the companies operating in the insurance and re-insurance activity standing at 33 in addition to 166 insurance service related providers for supporting insurance services. Gross written premiums amounted to Rls 21 billion in 2012 compared to Rls 8.5 billion in 2007, denoting an annual growth rate averaging 30 percent during this period.
SAMA is keen to regulate the insurance sector in accordance with high professional standards and practices that aim at promoting efficiency and helping insurance companies to provide high quality services for the insured, both individuals and corporations, thereby, enhancing their protection. In this context, SAMA is conducting a comprehensive study on the insurance sector in the Kingdom, taking into consideration its experience over the past years, and present and future challenges posed to it. During the initial stages of the study, the views and comments were obtained from related parties of the insurance sector including insurance companies, brokers and agencies, customers, individuals and corporations and relative governmental bodies, in order to come up with a clear vision of the challenges that the sector might face and make clear plans to address them and achieve more development, stability and growth in the forthcoming years, particularly, in terms of a more contribution to the domestic economy, raising awareness of insurance services, achieving protection and savings, enhancing sharing of information mechanism and improving dispute settlement procedures.
Dear Sisters and Brothers,
The insurance market has been witnessing constant development over the past years. This rapid development makes it imperative for companies to harness and make use of capabilities and human and technical resources to keep up with the sector�s development and challenges posed to it. The companies must be prepared for these challenges through the introduction and development of work policies and mechanisms, as well as qualifying and developing human resources to ensure insurance companies' growth and development. One of the most important tools, that contributes to ensuring companies� stability and development of their works, is good risk management, which would contribute to reducing insurance costs of all insured activities and curbing costs of insurance and investment operations� risks.
Another significant risk management tool for insurers is to have in place good arrangements for reinsurance to participate in transferring the burden of insured risks from the insured persons to reinsurers. SAMA looks forward to developing technical, financial and human resources by insurance companies operating in the Kingdom, so that they can gradually increase retention ratios in accordance with their capacity to absorb and manage risks. Another important tool for management of insurance companies� risks is appropriate pricing of their products. Prices should be fair, balanced and based on technical and actuarial basis, ensuring achievement of the common interests of related parties.
On the other hand, I would like, on this occasion, to commend the remarkable efforts exerted by the insurance sector over the past years in support of Saudization, where the percentage of male and female Saudi employees working in the insurance sector rose to 55 percent in 2012 from only 40 percent in 2007.
SAMA looks forward to exerting more efforts by insurance companies in this field to further raise Saudization ratios in the sector to higher levels, with more focus on the Saudization of positions at the level of senior management in companies as well as technical specialist insurance posts. It is worth noting that SAMA, in cooperation with the Institute of Banking, is currently working on organizing personnel qualification and development programs commensurate with the needs of the sector and relevant employees, in particular the training of staff specialized in insurance.
Dear Audience,
In conclusion, I would like to underscore the importance of carrying out insurance operations in accordance with technical and professional norms, laying down in place policies and appropriate working mechanisms to ensure the sustainability of insurance activity and concentration on competition by diversifying services and products, improving the services and products pricing in a balanced manner, and keenness to constantly Saudize posts and qualify employees in order to promote the insurance sector in the Kingdom to fulfill the goals sought by the legislator by issuing the Cooperative Insurance Companies Control Law.
Thank you for listening, wishing you and your forum success in raising and discussing all issues in participation with the host of Saudi and international specialists and professionals. May Allah grant you success.