HARMFUL COMPETITION AND ITS IMPACT ON TECHNICAL PERFORMANCE IN SAUDI INSURANCE COMPANIES

Abstract

This study addresses harmful competition and its impact on the technical performance of Saudi insurance companies. It aims to identify sound strategies to confront harmful competition within insurance firms and to understand the distinction between technical functions and technical performance in insurance companies. The study’s problem is centred around the effect of price competition in insurance companies and whether competition affects innovation and underwriting growth. It also investigates how harmful competition influences due compensation for policyholders and financial sustainability.

The study reached several findings, notably that Saudi insurance companies rely solely on pricing in their competitive practices. Profit margins decline due to harmful competition, which negatively affects companies’ financial capabilities and their financial sustainability, exposing them to long-term financial risks. Unethical and non-transparent harmful competition adversely affects technical performance in Saudi insurance companies.

The study recommends that the Insurance Authority review relevant regulations. It also advises insurance companies to cooperate in exchanging expertise, support innovation in insurance products and services, avoid price-based harmful competition, and develop effective technical performance evaluation systems that enable firms to measure the impact of harmful competition and take necessary improvement actions.