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Saudi Arabia to Invest Insurance Authority Funds to Ensure Sustainability

The new authority will regulate the insurance sector in the Kingdom. (Asharq Al-Awsat)
The new authority will regulate the insurance sector in the Kingdom. (Asharq Al-Awsat)
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Saudi Arabia to Invest Insurance Authority Funds to Ensure Sustainability

The new authority will regulate the insurance sector in the Kingdom. (Asharq Al-Awsat)
The new authority will regulate the insurance sector in the Kingdom. (Asharq Al-Awsat)

The Saudi government has granted both the Minister of Finance and the Chairman of the Board of Directors of the Insurance Authority the power to set the appropriate mechanisms to invest the funds of the new entity.

Earlier this month, the Saudi Cabinet, chaired by Crown Prince Mohammed bin Salman, approved the establishment of the Insurance Authority, within an endeavor to foster robust and competitive insurance entities within the Kingdom.

Finance Minister Mohammed Al-Jadaan described this measure as pivotal within the developmental blueprint of the financial sector, a component of the Vision 2030 program designed to boost the role of the insurance sector in the Kingdom.

According to information made available to Asharq Al-Awsat, the Council of Ministers decided to form a committee that includes representatives from the Central Bank and the ministries of finance, human resources, social development and health, as well as the Financial Sector Development Program (FSDP) and the Council of Health Insurance.

The committee is concerned with transferring properties, documents, financial allocations and initiatives related to the insurance sector from the Central Bank to the new body.

The Saudi Cabinet has called on the Health Insurance Council, when studying its draft organization, to take into account that its roles include implementing compulsory health insurance, identifying those covered by compulsory coverage, approving and qualifying health service providers, and operating the Nphies platform.

The Insurance Authority shall coordinate with the Central Bank when exercising the powers and tasks stipulated in its organization and the regulations related to the insurance sector, which have an impact on the monetary conditions and the stability of the financial sector.

The establishment of an independent unified entity concerned with regulating insurance in the Kingdom is expected to enhance the efficiency of this sector, raise its contribution to the non-oil domestic product, and keep pace with developments in the insurance industry around the world.

The Authority will complete the process of the Saudi Central Bank in developing the insurance sector, by providing the appropriate environment to create strong entities capable of competition and growth, supporting the stability of the insurance sector in particular, and the national economy in general, and protecting the interests of beneficiaries and policyholders.

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Türkiye's Central Bank Raises Inflation Forecasts, Vows Tight Policy

FILED - 24 May 2018, Türkiye, Istanbul: Turkish lira are kept fanned out. Photo: Can Merey/dpa
FILED - 24 May 2018, Türkiye, Istanbul: Turkish lira are kept fanned out. Photo: Can Merey/dpa
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Türkiye's Central Bank Raises Inflation Forecasts, Vows Tight Policy

FILED - 24 May 2018, Türkiye, Istanbul: Turkish lira are kept fanned out. Photo: Can Merey/dpa
FILED - 24 May 2018, Türkiye, Istanbul: Turkish lira are kept fanned out. Photo: Can Merey/dpa

Türkiye's central bank raised its year-end inflation forecasts for this year and next to 44% and 21% respectively on Friday, and Governor Fatih Karahan vowed to keep policy tight to propel the disinflation process and hit targets.

The bank's previous inflation report three months ago forecast year-end inflation of 38% in 2024 and 14% next year, Reuters reported. The revision underlines its tougher-than-expected battle against inflation that began with aggressive rate hikes 18 months ago.
Presenting a quarterly update in Ankara, Karahan cited improvement in core inflation trends even as service-related price readings are proceeding slower than anticipated. But even in that sector, inflation is gradually losing momentum, he said.
"We will decisively maintain our tight monetary policy stance until price stability is achieved," he said. "As the stickiness in services inflation weakens, the underlying trend of inflation will decline further in 2025."
October inflation remained loftier than expected, dipping only to 48.58% annually on the back of tight policy and so-called base effects, down from a peak above 75% in May.
Monthly inflation - a gauge closely monitored by the bank for signs of when to begin rate cuts - rose by 2.88% in the same period on the back of clothing and food prices.
The bank has hiked rates by 4,150 basis points between June 2023 and March 2024, to 50%, as part of an abrupt shift to orthodox policy after years of low rates aimed at stoking growth.

President Recep Tayyip Erdogan, who in past years was viewed as influencing monetary policy, had supported the previous unorthodoxy. It triggered a series of currency crashes and sent inflation soaring.

Erdogan was quoted on Friday as telling reporters that "no one should doubt" the steady decline in inflation and that economic steps would continue with discipline and determination to ease price pressures.

The central bank warned last month that a bump in recent inflation readings increased uncertainty, prompting analysts to delay expectations for the first rate cut to December or January.

Karahan said the new inflation forecasts were based on maintaining tight policy, adding the bank would do "whatever is necessary" to wrestle inflation down, and pointing to what he called a significant fall in the annual rate since May.

He said the slowdown in domestic demand continues at a moderate pace and the output gap has continued to decline in the third quarter.