(MENAFN - Arab News) Saudi vehicle insurance companies intend to create a record of accidents involving each motorist in the Kingdom to determine fitting insurance rates. Najm for Insurance Services takes a leading role in this process. The company will implement "Najm Net" this month.
The system creates an insurance record for each vehicle owner. It will comprise accidents and damages that the owner of a vehicle incurred during the validity of his insurance policy with one of the insurance companies in the Kingdom.
"This will provide insurance companies with a record for each of their clients, containing the number of traffic violations, the recurrence of accidents and the proportion of driver error," Badr Al-Ali, CEO of Najm for Insurance Services, told a local newspaper.
Al-Ali explained that this process would determine the driver's commitment to traffic and road safety regulations. It is a global system that has been applied in many countries worldwide.
The system would enable companies to treat each client personally and fairly. It would charge drivers an insurance fee that complies with their commitment to traffic safety rules.
Large companies which are in possession of a sizable fleet fear a possible blockage of their repeatedly errant drivers by vehicle insurance companies.
Syed Maqsud Ahmed, fleet manager of a leading company, said their insurer had not notified them about such a proposal. Mir Ahmed of another leading company with a fleet of over 800 vehicles said the same.
Many welcomed the proposal to monitor and link driver data to an insurance system, not only to reduce financial losses but also to contribute to improving on cautious driving and abiding by rules and road manners.
Car insurance helps to provide security to drivers. But in the Kingdom it has in fact made them more reckless, said Ali Abu Rasen. He feels that some drivers are causing an unnecessary burden to all stakeholders through causing road accidents.
Vehicle insurance companies have been complaining of losses for quite some time and calling for a review of the system and enforce measures that can reduce losses. The increasing rate of traffic accidents has been causing concern to everyone. There has been a steady increase of between 5 and 10 percent in premium per year for corporates and above 10 percent for individuals.
The vehicle insurance business in Saudi Arabia is one of the most lucrative in the world, with average yearly growth of 14 percent.
Vehicle insurance is the second largest after health insurance in the Kingdom and is expected to grow at a compounded annual growth rate (CAGR) of over 33 percent between 2011-2013, according to one study.