We all cheered for Saudi women last month when Saudi Arabia lifted the driving ban on women. The next consideration was the short and long-term implications of the Saudi government’s decision on the auto and insurance industries.
The first question is which industries will benefit the most from this decree? The obvious answer is the car manufacturers, but there will be a multiplier effect to this decision. As the decree goes into effect in June 2018, we can expect the number of drivers on the roads in the kingdom to almost double. These drivers will need a range of products and services for their cars, whether auto insurance, car wash facilities, car accessories and car servicing. So the car manufacturers aren’t the only ones that will benefit. Furthermore, suppliers to the auto industry, such as marketing and sales agencies, are expected to get a good boost.
If this turns out to be the case, the key beneficiary, especially in the near future would be the motor insurance industry. As women pass their driving tests and receive their licenses, the odds are that they will simply be added to existing insurance policies. The updates in policies will lead to higher premiums, which means more profit for the insurance companies. Smart policy owners will also update their policy limits to ensure adequate coverage for their whole family.
Source Credit: The National
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