Managers and workers in brokerage companies said that car insurance rates witnessed a decrease of 30% this year compared to last year in the context of price competition between insurance companies and their endeavor to increase the size of premiums, pointing to reductions in the bearing amounts and advantages to attract new dealers . They told «Emirates Today» that some companies are taking the clean records mechanism free of accidents as a pretext for “burning” prices, stressing the importance of the price reduction not affecting the quality of services provided to customers during the settlement of insurance claims.
Minimums
In detail, the sales manager of Fidelity Insurance Services, Adnan Elias, said that “car insurance rates continued to decline during the current year compared to last year, to reach the minimum levels mentioned in the new document that was applied at the beginning of 2017 in light of competition between insurance companies to This vital sector. ” He explained that «the rate of decline during the past year ranged between 15 and 20% compared to price levels in the year 2019», pointing out that «many insurance companies also resorted to granting discounts on the bearing rates (the amount borne by the insured, who caused the accidents during the settlement Claims). And he added that «the bearing amounts have become for many companies in the lower limits».
Advantages
And Elias indicated that «the insurance rates for vehicles in some cases fall below the percentages mentioned in the new document that was applied at the beginning of the year 2017 for owners of clean records free of accidents and insurance claims», pointing out that “according to the instructions of the Insurance Authority, companies can grant committed drivers These cuts. ” He stated that «the benefits related to assistance on the road and towing the vehicle in the event of accidents are now given by many companies, free of charge, to customers.
market share
For his part, Said Al-Muhairi, CEO of United Gulf Insurance Brokers, said that “many insurance companies always resort to reviewing their performance record regarding vehicle insurance,” noting that “if positive results are recorded, they reduce price levels in the context of obtaining On the largest amount of premiums and increase its market share.
He pointed out that «this sector is a major supplier of liquidity to insurance companies in general».
Al-Muhairi added that “the car insurance market witnessed a decline of between 10 and 20% during the current year compared to the previous year.” He pointed out that “some insurance companies have margins in their financial results that give them flexibility to reduce prices without causing this to them.”
He stated that «continuously lowering prices is not a wise policy, especially if it affected the financial results of companies», pointing out that it is “best for companies to resort to granting free benefits and services that achieve added value for insurance coverage instead of reducing the price in the framework of competition only.”
Al-Muhairi said, “Competition must be concentrated in the quality of services, not reducing prices in an illicit way.”
He stressed the importance of "the lowering of insurance rates not affecting the quality of services provided to customers", stressing "the need for prices to remain within the logical limits that qualify the policy holder to obtain services of appropriate quality while settling insurance claims."
Competition
In turn, George Gashkar, General Manager of GateWay International Assurance (Insurance Agents) said, “The year 2019 witnessed the largest decline in vehicle insurance prices compared to their levels since the application of the new policy at the beginning of 2017,” noting that “competition between "The insurance companies in the local market have reached very high levels."
Al-Ashqar added that "the current prices of vehicle insurance for some companies have fallen to the levels before the application of the document," noting that "some companies take the issue of clean record owners as an excuse to reduce prices by large proportions."
He stated that «a lot of companies are now looking to increase the premiums only without looking at the risks that might result from lowering the price».
Effect
Al-Ashqar indicated that "the rates of decline in car insurance rates during the current year reached about 30% compared to last year," explaining that "competition between companies affected sectors other than cars, especially the fire insurance sector."
And that "the decline in prices will undoubtedly affect the quality of services provided to customers," noting that "some companies price documents in a way far from the technical foundations."
He added that «some companies resorted to reducing the amounts of the bearing within the documents in the framework of attracting more new dealers», pointing out that “the declines affected sports and luxury cars as well.”
He stressed that «the companies are currently obligated to provide high-level services, especially after the committees for the settlement of insurance disputes start their work to deal with complaints».
Tolerance ratios
Adnan Elias, Sales Director of Fidelity Insurance Services, explained that according to the insurance policy, the tolerance ratios (amount) for vehicles with a value of more than 50 thousand dirhams and not more than 100 thousand dirhams, up to 700 dirhams for a maximum of each accident, and 1000 dirhams per An accident for vehicles with a value of more than 100 thousand dirhams and not more than 250 thousand dirhams, while the carrying amount amounts to 1200 dirhams for private vehicles with a value of more than 250 thousand dirhams.