The Saudi Central Bank (SAMA) on Thursday announced the approval of a new parcel insurance product which aims to boost the kingdom’s e-commerce sector.
The product will be offered by several insurance companies operating in Saudi Arabia to cover the risk of transporting parcels in the event of loss or damage.
SAMA said that approving this product came in coordination with the Communications and Information Technology Commission, and support the kingdom’s position as a leading global logistics hub connecting three continents.
It added in a statement cited by Saudi Press Agency that the parcel insurance product has been developed to promote and support e-commerce, increasing parcels shipping domestically and internationally.
This launch also comes as part of the ongoing efforts to support the insurance sector to achieve the targets of the Financial Sector Development Program.
SAMA said the parcel insurance product will improve the customer experience, raising the level of services provided to them in the postal sector and ensuring financial compensation in the event of loss or damage of parcels.
Valued at $970 million, Saudi Arabia’s courier, express and parcel (CEP) delivery market is expected to grow by an average of 6.5 percent per year until 2026, recent research said.
Despite the challenges that remain with last-mile delivery, the growth is driven by the e-commerce boom in the wake of the pandemic, according to ResearchAndMarkets.com.
In March, e-commerce giant Amazon announced it is growing its operations network across Saudi Arabia to include six fulfilment centres and 13 delivery stations, creating more than 1,500 new jobs in 2021.
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