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Women driving to boost auto, insurance sectors

Saudi Arabia, June 26, 2018

Experts expect 15 percent increase in car sales following the launch of women driving in Saudi Arabia. They also predict 20 percent rise in motor vehicle insurance sales and remarkable fall in unemployment rate among Saudi women.

The historic decision of Custodian of the Two Holy Mosques King Salman to allow women to drive will also strengthen the national economy and boost retail trade and the banking sector, Al-Madina Arabic daily quoted the experts as saying.

Ali Rida, deputy chairman of the national committee for automobile agencies, said women driving would increase car sales by 15 percent in the long run. It will also contribute to increasing the number of Saudi women workers.

“Our campaigns in the coming months will focus on women drivers,” Rida told Al-Madina. “Women driving will have a positive impact on Saudi society,” he added.

Meanwhile, Adel Al-Eissa, spokesman of insurance companies, said women driving will add a new group of customers to the Kingdom’s car insurance market. They will boost car insurance sales in the Kingdom, he added.

Luay Abdu, an insurance consultant, said the move’s positive result would not appear immediately as some people thought. “The impact will be made visible within the next three to five years especially because of the special nature of Saudis.”

Many Saudi families do not like their women driving on streets because of customs and traditions. However, Abdu expected 10 percent increase in car insurance sales in the first year, which will be doubled to reach 20 percent within the next three to five years.

He said women driving would not help get rid of foreign drivers as many Saudi families would prefer to keep them until women drivers achieve necessary confidence. He did not expect any major change in insurance premiums as a result of women driving.

Mohammed Hadal, another insurance specialist, said he expected 25 to 30 percent rise in car insurance. “It will also help many women get front office jobs at insurance firms.

“I think there is exaggeration when people say the premium would increase. They should know that the premium is determined by other factors not the gender of drivers,” Hadal said. He said many families wanted to have male drivers for their transportation instead of own women.

Dr. Salim Baujaja, head of the economics department at Taif University, said women driving would not only strengthen the car market but also related businesses including workshops, car accessories and spare parts.

“The decision will also reduce unemployment rate among Saudi women as transportation was one of the major hurdles facing them,” Baujaja told Al-Madina. There are more than 1.5 million family drivers in the Kingdom.

“Women driving will contribute to reducing foreign remittances of expat drivers.”

Economist Dr. Abdullah Al-Maghlouth said women driving would have a positive impact on Saudi economy in general and banking, insurance and retail trade in particular.

“The banking sector will be one of the major beneficiaries of the decision as many women will take loans to purchase cars,” he pointed out. It will also increase the number of women work force. “Women will have more liquid money and would increase business,” said Al-Maghlouth.

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