Saudi insurers surge as vehicle checks enforced

Vehicles involved in any traffic violation in Saudi Arabia are automatically checked for insurance. (AFP)
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Updated 09 July 2020

Saudi insurers surge as vehicle checks enforced

  • Move comes as relief to industry still reeling from pandemic fallout

RIYADH: Saudi insurance stocks surged on Wednesday after the traffic department said that it would enforce vehicle checks to ensure drivers had appropriate cover.

The move sent the share prices of several insurers soaring as investors bet they would benefit, as more people would subsequently be forced to buy policies.

Under the current rules, if a vehicle is involved in any traffic violation in the Kingdom, its record is automatically checked to see if there is an insurance policy linked to it.

The top five gainers on the Tadawul were all insurance firms, led by Axa, Walaa and Malath, all up by almost 10 percent on the day.

The insurance sector is one of the most represented on the Tadawul with 32 companies listed. It is also heavily exposed to the fallout from the coronavirus pandemic.

The pandemic has heaped pressure on regional insurers with S&P warning in April that a spike in claims and a decline in equity markets could hurt their balance sheets.

Aljazira Capital CEO Walid bin Ghaith told Al Araibya that the new decision would be a major boost for the car insurance market in the Kingdom.

“As it is known, the insurance (of cars) is mandatory legally, but there is no mechanism to mandate all people to insure their cars,” he said. “This damaged the insurance companies, since a lot of cars are not insured, so disputes emerge when identifying the liable side in the incident. This will result in two things: First, improving the rate of claims on the insurance companies, and the second, and the more important, is opening a big market or doubling the market for the car insurance companies.”

The move will be welcome news for the auto insurance sector in Saudi Arabia, as car sales worldwide come under increased pressure as people, fearful for their job security, delay major purchasing decisions.


Virus sees Booking.com slash quarter of global staff

Updated 04 August 2020

Virus sees Booking.com slash quarter of global staff

  • The company warned that “up to 25 percent” of employees could go in what it called an “extremely difficult step”
  • Booking.com’s Amsterdam headquarters was expected to be among the sites affected

THE HAGUE: Online travel agency Booking.com said Tuesday it will cut up to a quarter of staff worldwide due to the ongoing coronavirus pandemic, leading to thousands of job losses.
The Amsterdam-based booking site, which employs around 17,500 people around the world, declined to give an exact number of posts that will be slashed, saying details would become clearer “in the coming weeks and months.”
But it warned that “up to 25 percent” of employees could go in what it called an “extremely difficult step.”
“The Covid-19 crisis has devastated the travel industry, and we continue to feel the impact as travel volumes remain significantly reduced,” the company said in a statement sent to AFP.
“While we have done much to save as many jobs as possible, we believe we must restructure our organization to match our expectation of the future of travel,” it added.
Booking.com’s Amsterdam headquarters was expected to be among the sites affected, Dutch media reports added.
Hard-hit by the slowdown in international travel resulting from the lockdown, Booking.com follows in the footsteps of other digital travel sites such as Airbnb and TripAdviser, which have also laid off around 25 percent of their workforce.
Booking.com applied in April for state support.
Last month it received some 61 million euros ($71.8 million) from the Dutch state, making it the third-largest recipient of support behind flagship airline KLM and Dutch Rail (NS), the ANP national news agency reported.
Founded in 1996, Booking.com has some 28 million listings on its website which is available in 43 languages.