In the context of competition with declining prices since the beginning of 2020
Insurance companies relax tighter pricing conditions for 4 classes of drivers
Average car insurance rates decreased by about 30%.
Managers and workers in brokerage firms said that insurance companies have resorted to easing the tight pricing conditions for four categories of drivers in the context of price competition, pointing out that car insurance rates have witnessed a significant decline since the beginning of this year, compared to the price levels at the beginning of 2017 when applying The new vehicle insurance policy.
They stated to Emirates Today that in the past, insurance companies imposed some strict conditions for pricing documents for owners of sports vehicles or drivers under the age of 25 or who had recently obtained driving licenses, in addition to those who caused accidents and had unclean traffic records. However, the picture has changed during the recent period, indicating that the differences between drivers have begun to diminish in terms of pricing documents.
In detail, Adnan Elias, the sales manager of the "Fidelity Insurance Services Company", said that insurance companies operating in the local market and within the framework of competition have resorted to easing pricing conditions for some categories of drivers that were previously classified within the high risk categories, indicating that these companies The availability of lower prices during the recent period.
Ilias explained that insurance companies were imposing some strict conditions for pricing documents for drivers under the age of 25, who had recently obtained driving licenses, or for owners of sports vehicles, as well as drivers who caused accidents and had unclean traffic records.
He pointed out that during the recent period, some companies have resorted to relaxing these conditions and providing acceptable prices for those groups within the framework of competition in the market, adding: "40% of the companies we deal with have eased the strict pricing conditions."
Elias explained that some companies are only interested in obtaining market share regardless of the consequences, as their financial performance allows them to do so, indicating that some other companies still follow the same strict policies towards dealers from these categories.
He also pointed out that insurance rates have witnessed a significant decline since the beginning of this year, compared to the price levels at the beginning of 2017 when the new vehicle insurance policy was applied.
He said, "The document set minimum and upper limits for insurance rates."
For his part, the General Manager of "Getaway International Assurance" (insurance agents), George Al-Ashqar, said that most insurance companies in the local market are finally resorting to pricing documents regardless of the technical basis, pointing out that the current prices in the market do not depend on Risk assessment.
He added that in light of the strong competition between companies since the beginning of this year, the average prices recorded a decline of about 30% compared to their levels in the period last year, indicating that companies are currently granting facilities in prices at various levels.
He stated that most companies, with limited exceptions, no longer take into account the strict conditions that they applied to drivers under 25 years of age or those who obtained recent driving licenses or who caused accidents and claims, as well as sports vehicles.
Al-Ashkar pointed out that the differences between drivers began to diminish in terms of pricing documents, indicating that competition between companies is focused primarily in the car insurance sector.
He explained that the technical pricing principles take into account a wide range of factors that influence the price, especially with regard to the driver's experience and years of driving, as well as his traffic record and the quality of the vehicle.
In turn, Saeed Al Muhairi, CEO of United Gulf Insurance Brokers, said: “We have noticed recently that insurance companies have provided reduced rates for categories of drivers in the context of price competition,” explaining that “in the past, drivers were under the age of 25 years. Or those who recently obtained driving licenses or caused traffic accidents get higher insurance rates compared to other groups, but the situation has changed now. ”
Al-Muhairi added that insurance companies have become distracting from the risks of these groups and provide them with reduced prices close to those obtained by the customer in normal cases, pointing to the importance of companies adhering to the issue of legalizing discounts for some categories or tightening pricing conditions for other categories.
Al-Muhairi indicated that prices continue to decline since the beginning of this year, saying: "If this continues, we may again reach companies with losses similar to the levels before 2017."
He stressed the need to adhere to the technical principles of pricing that take into account risks, and the document is priced according to a number of factors related to the driver on one side and the vehicle on the other hand.
The 4 classes
The 4 classes
Sports vehicle owners.
■ Drivers under the age of 25.
■ drivers who have recently obtained driving licenses.
Accidents and unclean traffic records.
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