At rates of up to 50% compared to the price level at the beginning of the “Corona pandemic”

Brokers: Car insurance prices are falling below the levels of the "unified policy"

• The policy of granting discounts to owners of accident-free records now applies to all categories of drivers.

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• The falling accident rate helped companies implement further cuts.

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Managers and employees of brokerage companies said that car insurance prices recorded a significant decline during the first half of this year, compared to the same period last year, and rates reached 50% compared to the level of prices at the beginning of the “Corona” pandemic, noting that the average insurance prices On vehicles, it is currently below the levels mentioned in the unified vehicle insurance policy that was applied in 2017.

They told «Emirates Today» that only a small part of the companies resorted to limited discounts, while most of the companies followed the policy of fierce competition by reducing prices in large proportions, and increasing the commission of brokers, to obtain the largest possible share of the vehicle insurance market, noting that The fall in the accident rate and the number of driving hours helped companies to apply more discounts on their prices.

average prices

The General Manager of Gateway International Assurance Company (insurance agents), George Al-Ashkar, said that the average car insurance prices witnessed a significant decline during the first half of this year, compared to the same period last year, with rates reaching 50% compared to the level of prices. at the beginning of the pandemic.

Al-Ashqar added that the average vehicle insurance rates are currently below the levels mentioned in the unified vehicle insurance policy that was applied in 2017, noting that the level of decline in prices has increased significantly in recent months.

And he indicated that the decline is still continuing in the third quarter of this year, and this trend is expected to continue during the last quarter as well, in light of the current indicators in the market, due to competition between companies in this sector, pointing out that the decline in the accident rate and the number of driving hours helped companies to Apply more discounts on their prices.

He pointed out that the prices at their current levels are far from the technical bases of underwriting that take into account the risks, wondering about the extent of the companies' ability to settle claims in the event of accidents occurring within these pricing policies, explaining that the regulatory authorities should intervene to monitor the movement of prices in the market under the current circumstances.

He pointed out that the policy of granting discounts to drivers with clean records free of accidents, is now applicable to all categories of drivers, indicating that the new insurance company only asks the customer for an acknowledgment that he has not committed accidents and caused claims with the company he dealt with in the previous year.

new document

In addition, Adnan Elias, Director of Sales at Fidelity Insurance Services, said, "The average prices are currently at their lowest levels, and have fallen below the limits mentioned in the new document that was applied in 2017," noting that the bulk of the Companies have reduced average prices by 50-60% since the beginning of the pandemic.

Elias indicated that the first half of this year witnessed the largest decline in the average car insurance prices ever, pointing out that only a small part of the companies resorted to limited reductions, while most companies followed the policy of fierce competition by reducing prices by large percentages, and increasing the commission of brokers. , to get the largest possible share of the vehicle insurance market.

He pointed out that the customer, whether he is the cause of an accident or not, moves from one company to another without restrictions, regardless of his traffic record and the number of accidents he caused. If the insurance company raises the price of the policy for the cause of the accident, he resorts to another company directly, And at a much lower price.

He expected that prices would continue to decline during the coming period, especially with insurance companies resorting to providing more incentives to intermediaries, in the context of competition and selling the largest number of insurance policies, pointing out the importance of the current prices not affecting the quality of services provided to customers during the settlement of claims.

He indicated that the bulk of companies have reduced prices, and therefore they attract most dealers who are looking for the cheapest prices, regardless of the services provided by this company, noting that the decline in average prices affected both third-party and comprehensive insurance policies.

continuous decline

In a related context, Saeed Al Muhairi, Executive Director of United Gulf Insurance Brokers, said that “prices have continued to decline in large proportions since the beginning of the pandemic,” adding that insurance companies are competing with each other to obtain the largest market share in the vehicle insurance sector.

Al-Muhairi indicated that the intensity of competition is increasing, and therefore it is not possible to predict the stage in which prices can stabilize or rise again in specific proportions, pointing out that the average prices in the market for comprehensive insurance, and against others, are below the levels of 2017 at the current stage.

He pointed out that prices may continue to decline, if insurance companies record good technical financial results, but if they record losses, these companies will be forced to raise prices, pointing out that pricing policies differ from one company to another, and are based primarily on their financial position.

• The decrease in accidents and the number of driving hours helped companies to implement further reductions in their prices.

• Competition by reducing prices and increasing commissions to obtain the largest share of the market.

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