I expected prices to continue falling in 2021 as competition increases

AXA: Decline in claims contributed to lowering vehicle insurance rates

• Competition between companies is strong, especially in the luxury car sector.

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• Frank Heimburger: “Most of the dealers do not actually pay only the minimum installments at present.”

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AXA Gulf Insurance Company reported that the decrease in car insurance rates during the past year was a result of the decline in the number of claims due to the closure procedures and the changes they caused in driving rates, indicating an additional decrease in the first quarter of this year, and expected at the same time The decline continues in 2021.

She explained to Emirates Today that the additional decrease in insurance prices may result from increased competition in the market, pointing out that most dealers currently do not actually pay only the minimum premiums.

Dealer behavior

In detail, the CEO of Individuals Insurance at AXA Gulf, Frank Heimburger, said that the current level of car insurance prices is not sustainable in the long term, indicating that since the beginning of the Corona pandemic and the closing procedures in early 2020, insurance premium rates have decreased. Car prices by about 25%, and the market is currently witnessing an additional decline in the first quarter of this year.

Hemburger explained that this is primarily due to the change in the behavior of dealers.

Expectations

Regarding the expectations of car insurance rates during the current year, compared to last year, Heimburger said: “Over the whole last year we have witnessed a significant decrease in car insurance rates, but we do not expect the level of pricing to drop to less than an additional 10%, compared to the level that was It is at the end of 2020 ».

Hemburger attributed the decline in car insurance rates, during the past year, to the decline in the number of claims, due to the closure measures and the changes they caused in driving rates, adding: “We notice this year that the levels of claims are similar to the period after the summer of 2020.”

the future

"As for the future situation, we see the possibility for companies to view the methodology of working from home as a sustainable approach, which would encourage a reduction in the need for driving, and thus reduce accidents and claims," ​​he said.

He added, "If this becomes the case, the premium rate should reflect the new normal, which is still unknown at this stage."

Increased competition

"With regard to the additional decline in insurance prices, which we may witness in 2021, it may result from increased competition in the market, as insurance companies will seek to enhance their growth and increase their market share," he said.

He said, "It is possible that we will see an additional decrease in car insurance premiums in 2021, as a result of increased competition in the market," pointing out that most of the dealers now only actually pay the minimum premiums.

He explained, "In addition, competition is very strong, especially in the luxury car sector, which makes rewarding good drivers gaining increasing importance and becoming the focus of the insurance authority's attention and awareness campaigns."

Digital transformation

The CEO of Individuals Insurance at AXA Gulf, Frank Hempburger, said that the Corona pandemic and the closure measures that followed it, during the past year, have accelerated the company's program for digital transformation and increased its investments in improving the digital customer experience.

He added that in 2020 the company launched an easy-to-use online portal through the Internet and mobile phone, to serve car insurance dealers at AXA, which provided a new experience for them that would enable them to purchase and renew their insurance policies and submit their claims related to all the company's products completely remotely.

He stressed that this trend will continue during the current year, as many companies have increased their investment in the digital field to improve the customer experience.

Companies view remote work as a sustainable approach, which reduces the need for leadership.

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