Assessing the factors influencing auto insurance prices in Saudi Arabia

Abstract

The Saudi insurance industry has transformed from a beginner sector to a more systematic and structured area with enormous expansion prospects in future. It plays a crucial role in achieving the goals of Vision 2030. This study assessed the factors that influence auto insurance prices in Saudi Arabia. The objective is to help insurance firms address the reasons for and conveniently monitor car insurance pricing. According to Saudi Central Bank statistics, gross written premiums increased from 2.7 billion riyals to 3.7 billion riyals in 2023, representing a 38.9% increase. Those were the highest figures in the last five years. The prices were to remain high throughout the second, third, and fourth quarters of 2023. The paper followed a quantitative design approach using exploratory data analysis in Excel, a regression learner, and a curve fitter in Matlab. The paper's variables only included gender, age, and marital status. Other factors are constant, such as geographical area, make of vehicle, manufacture year, and type of insurance coverage; therefore, demographic factors could be concentrated. The highest premium in the dataset was SR 2054 for both genders, ages 18-20, with different marital status. The results show that age is the most significant factor in this study. The findings propose a promising approach for the insurance market that also affects the country's growth.