To counter the burning of prices, stop losses and ensure the payment of insurance claims

As of tomorrow, insurance companies will raise the prices of “Al Shamil” and “Against Others” policies.

Low prices negatively affect the completion of car repairs on time and with the required quality.

Photography: Ahmed Ardeti

A group of insurance companies operating in the country held a meeting at the end of last week, in which they agreed to raise the prices of all types of car insurance policies, starting tomorrow, Tuesday, November 15, to confront the “price burning” operations witnessed by the market, which caused losses to some companies. As well as ensuring that insurance claims are not late in paying, and that the financial solvency required by the Central Bank is adhered to.

minimum

According to the details of the meeting charter, which Emirates Today reviewed, eight insurance companies have agreed to raise the minimum price of the “comprehensive insurance” document for a saloon car, to 1,100 dirhams, compared to 735 dirhams currently, while the minimum amount for the “payment” car document has been set. Al Rifai » to become 1,400 dirhams instead of 1,050 dirhams currently, and the minimum insurance policy for transport vehicles was set to become 1,200 dirhams, compared to 700 dirhams currently.

The price of the third party insurance policy was also raised by 30% compared to what it is now.

commission rate

According to the document, the commission granted to brokers was reduced from 30% to 20%, and the companies agreed to hold another meeting a week later, to follow up on the implementation of the decision, calling on the rest of the companies that issue insurance policies at a low price, to join the charter that was signed by the companies. eight combined.

insurance market

An official source in the insurance sector told «Emirates Today», who preferred not to be named, that the large insurance companies in the market did not join the meeting, given that they sell documents at high prices in the first place, and their signature on the agreement that was concluded, means their commitment to the minimum set for insurance documents, It's less than what you're currently selling, so you didn't participate.

He explained that the insurance market is witnessing a number of problems that require cooperation and solidarity of all, the most important of which is the exploitation of some companies for the period of the spread of the Corona virus (Covid 19), and beyond until now, in granting large discounts of up to 80% on the minimum document price set by the bank. Central, 50% goes to policyholders, 30% commission to brokers.

And he continued, "The 50% discount set for the first line of defense was extended to the rest of the insured, in light of the leniency of some companies in checking the profession of the insurance applicant, desirous of selling," stressing that this policy has incurred losses for a number of companies during the past two years.

He stated that the price of the insurance policy "against third parties" was also raised by 30% compared to what it is now.

personal initiative

The official added that the meeting that took place between the eight companies came on their own initiative, with the desire of the managements of these companies to address potential losses, as a result of burning prices, selling at less than cost, and then being held accountable by the Central Bank, facing the possibility of a merger request, and meeting the solvency requirements. set by the Central.

He pointed out that low prices would also negatively affect the companies' commitment to pay claims and complete car repairs on time and with the required quality.

market study

He revealed that the meeting will also prepare a market study during the week following the price hike, to monitor the impact of this on the overall prices, and to ensure that the brokers dealing with them implement what has been agreed upon.

He said that most of the combined companies are medium, not large, since the latter maintain fairly high price levels, and are linked to car agencies that follow almost the same investment group.

Determining the minimum for the “four-wheel drive” car document to become 1400 dirhams instead of 1050 dirhams currently.

Raising the minimum price for a comprehensive insurance policy for a saloon car, to 1,100 dirhams, compared to 735 dirhams currently.

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