Arab Journal of Administration المجلة العربية للإدارة


In order for the price to be suitable for the parties to the contract and to ensure the continuity and success of the insurance, there are several conditions for the price that must be taken into account when pricing, as well as when adjusting prices, these conditions are summarized as follows : 1 - Sufficiency: It means that the premium is sufficient to cover the costs of the policy, which are represented in the expenses and compensation in addition to the insured's profit margin. The insufficient price for the insured leads to his bankruptcy and has harmful consequences for the insurance service, whether for the insured or the community. 2- Reasonability: It means that the average premium is not greater than necessary, and thus the insured achieves huge profits as a result, and in light of this, the price should be sufficient to ensure only normal and reasonable profits, as the overpricing leads to the insured shifting to other insurance companies that offer lower prices Especially in light of the presence of competition or their tendency to an alternative means to manage their risks, and thus the final result is the effect on the number of insured units, which violates the law of large numbers and what makes insurance in the end a speculative or gambling process that lacks accurate forecast. 3 - Justice: Equity in relation to the insurance price means that the price varies according to the degree of risk, meaning that the price is directly proportional to the degree of risk, and this leads to the difference in the price from one insured to another when contracting, but rather that the price differs for the insured himself from one period to another whenever circumstances are created that require this and are performed It increases the probability of risk occurring, and following the average price does not achieve justice because it will be less than necessary for insured units that are exposed to a higher degree of risk, and on the contrary, it will be greater than necessary for units that are exposed to a lower degree of risk. Since fairness is one of the basic conditions in determining fair insurance prices through its correlation with the degree of risk and loss rates in relation to the net premium and its correlation also with the rates of commission, expenses and interest in relation to the commercial premium, it is thus considered one of the most important problems of insurance in general and car insurance in particular, as well as a review of these Prices are based on past experience, as statistics have proven unfair, which is not desirable for either the public of the insured or those who set and adjust these prices. In order to achieve fairness in determining and adjusting prices, it was necessary to search for tools that help in this, perhaps the most important of which is the classification of risks in car insurance because of its importance, especially for the Saudi insurance market. There is no doubt that the Kingdom is considered one of the first countries to adopt what is modern and innovative, just like any other country that wants to catch up with the developed countries, and the new world order and the implementation of the GATT agreement will increase the number of cars significantly from day to day, this The large increase in the number of cars while not limiting their import or ownership helps to increase the chances of achieving car accidents and the degree of their severity. As a result of implementing the GATT and reducing customs, most cars in the Kingdom of Saudi Arabia are newly manufactured. Consequently, most car accidents are caused by the recklessness and speed of the driver, who is dominated by the luster of the modern, fast and powerful car, and perhaps this important element plays a key role in achieving car accidents and their severity Which is not taken into account when determining the basis for pricing car insurance of all kinds, but rather the loss of vehicle data when determining the price. Through the foregoing, the research topic is closely related to this vital problem, as shed light on the characteristics of car drivers and the extent of their relationship to the severity of car accidents in Saudi Arabia. In other words, this study examines the extent of a significant relationship between the severity of car accidents and the set of demographic indicators that relate to motorists according to the expected risks such as age, nationality, experience, and the location of the accident. Which can be used by insurance companies as a model that can be applied to classify risks, that is, to know the degree of risk of motorists.