Saudi Arabia tightens oversight of car insurance prices
In Saudi Arabia, the Insurance Authority has tightened oversight of pricing in the motor insurance sector. The regulator introduced six standards under which insurance companies must set fair, justified and financially sustainable insurance premiums, preventing prices from falling below a technically justified level.
As Asharq Al-Awsat reports, the new rules are intended to curb practices that could harm competition, including price dumping. Salem Baajaja, a professor of economics at King Abdulaziz University, said oversight should concern the fairness of calculation methods rather than setting identical rates for all insurers. According to him, companies should retain the ability to compete through operational efficiency, service quality, claims settlement and more accurate risk assessment models.
Rules for car leasing
The regulator is also working to eliminate ambiguities in vehicle insurance rules for leased cars in order to strengthen the protection of lessees' rights and transparency. According to consumer protection specialist Abdulaziz Al-Khudairi, financial companies must obtain at least three comprehensive insurance quotes each year and offer the lessee the cheapest option.
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Discounts from insurers, including those for no claims, are credited to a separate insurance account of the lessee, and the balance on it is settled after the contract ends. Vehicles must also be revalued annually taking depreciation into account, so the insurance premium should decrease along with the value of the vehicle.
Market and complaints
Some policyholders reported a gradual increase in the cost of motor insurance, in some cases to a level six times higher than previous prices. They expect the new standards to ensure more transparent and fair rates.
According to the Saudi insurance market report for the first quarter of 2026, 11.2 million vehicles were covered by insurance. The volume of gross written premiums for motor insurance reached 5 billion Saudi riyals, or about $1.3 billion. The monthly complaint rate fell to 0.09%, compared with 0.12%.
