A new mechanism that enables discounts to be granted without the minimum mentioned in the document

Insurance companies .. Signing an undertaking "No claims" is a condition to obtain the discount

• Competition between insurance companies for the auto sector has reached significant levels.

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Directors of insurance companies said that there are companies operating in the local market that require dealers to sign a pledge “No claims”, as a condition for granting them the discounts for owners of traffic records without accidents, explaining that this mechanism has emerged during the recent period, and enables companies to grant discounts Without the minimum mentioned in the document, provided that the insured bears responsibility for the correctness of the data contained in the undertaking.

They added, to Emirates Today, that insurance companies took advantage of easing pricing conditions for holders of clean records, and accordingly reduced prices to non-technical levels, and accordingly, to increase sales volume, they resorted to making this mechanism available.

For its part, the Emirates Insurance Association said that the customer bears the responsibility for the undertaking, indicating that if the insured causes an accident, and the insurance company finds that his traffic record is not clean for the previous year, or that he obtained the reduction based on wrong information he provided, then the insurance company can object And transferring the issue of compensation to the courts.

condition

In detail, Adnan Elias, the sales manager at Fidelity Insurance Services, said that some insurance companies, as part of their efforts to grant discounts to clean record holders, require dealers to sign a pledge “No claims”, as a condition under which a discount is granted on vehicle insurance prices. With rates ranging between 10 and 30% below the minimum, pointing out that this step comes within the framework of competition between companies over prices in the market.

Elias added that the volume of competition between insurance companies over the auto insurance sector has reached great levels during the recent period, in the context of seeking to increase the volume of premiums in this vital sector, indicating that “a pledge (not claims) bears the responsibility of the dealer, in case he caused an accident And an insurance claim, during the previous year ».

minimum

For his part, the CEO of United Gulf Insurance Brokers, Saeed Al Muhairi, said that upon signing the pledge “No claims”, the customer gets discount rates below the minimum, explaining that the insured bears the responsibility to sign this pledge, in case it caused an accident In the previous year or two, the insurance company discovered that after it caused an accident covered in the insurance policy subject to the reduction.

He stated that the lack of data for some companies prompts them to require the dealer to sign the undertaking, noting that a large number of insurance companies operating in the local market compete with each other for vehicle insurance rates in particular.

Al Muhairi added that this may affect the business of insurance companies, brokerage firms alike, and the sector as a whole.

He stated that insurance companies took advantage of easing pricing conditions for clean record holders, and accordingly reduced prices to non-technical levels.

Great vogue

In turn, the General Manager of "Getaway International Assurance" (insurance agents), George Al-Ashqar, said that some insurance companies, and in light of the lack of data on the records of drivers, resorted to the mechanism of signing that pledge, pointing out that this mechanism was very popular. During the recent period, insurance companies were able to grant discounts below the minimum in the legal framework, provided that the insured bears responsibility for the correctness of the data contained in the undertaking.

Al-Ashkar pointed out that vehicle insurance prices have witnessed a significant decline during the past months, indicating that the average rate of decline in car insurance rates amounted to about 40%, compared to the levels at the beginning of this year.

He added that easing price conditions, on large price classes, is mainly related to competition between companies.

Competition

In addition, the Secretary-General of the Emirates Insurance Association, Farid Lotfi, said that there is a situation of competition in the market, between insurance companies, for the prices of the vehicle insurance sector, which has increased in intensity in recent months.

He pointed out that the decline in prices, to large levels, may harm some companies during the coming period, stressing the importance of setting prices, according to technical principles that take into account the size of risks.

consequences

Lutfi stated that the decline in prices, at these levels, may negatively affect the financial results of insurance companies, especially in their technical side, far from the results achieved by insurance companies' investments in financial markets, or other sectors, indicating that these practices, regarding insurance rates Cars, their results may appear during the next fiscal year or two.

He explained that the customer bears the responsibility for the undertaking, pointing out that, in the event the insured causes an accident, and the insurance company finds that his traffic record is not clean for the previous year, or that he obtained the reduction based on wrong information he provided, then the insurance company can object, and transfer the compensation issue To the courts.

Comprehensive record

The Secretary-General of the Emirates Insurance Association, Farid Lotfi, said that the association works in coordination with the Insurance Authority and other government agencies to provide a comprehensive record of drivers in the country, which insurance companies can verify, in the framework of granting discounts to committed drivers, or tightening price conditions for the insured. Those who caused accidents and have unclean traffic records, pointing out that this data is currently available in some emirates of the country, and work is underway to complete this project, which will contribute to increasing the sector's efficiency.

The insured is responsible for the correctness of the data contained in the “No claims” pledge.

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