Hike in motor and health insurance premiums likely to be implemented soon
‘Stiff competition’ in the prices of motor and medical insurance products, coupled with a sudden rise in the number of insurance claims, is likely to push up the premiums of such schemes in Qatar.
“Be it medical insurance or car insurance, these products aren’t benefiting any insurance service providers because of the ongoing price war,” Ali Ibrahim Al Abdul Ghani, Chief Executive Officer of Qatar Islamic Insurance Company (QIIC) told The Peninsula.
“We’re constantly negotiating with Qatar Central Bank (QCB), the banking and insurance sector regulator, and have conveyed our legitimate concerns about the stiff competition in these segments to play a role to address the issue. We had a constructive meeting with the QCB officials along with representatives from the Traffic Department. Things are expected to move in a positive direction within a few months,” he added.
He explained that the prices of car and medical insurance services were already very competitive, but the massive ongoing construction works and traffic diversions have caused a sudden rise in claims to further worsen the situation, which is expected to remain the same until 2020.
“Things are anticipated to improve with the completion of construction works and starting of the Doha Metro, which may help reduce the number of vehicles from roads and thus accidents,” he said.
On the outlook for local insurance market, Ali said that things are expected to be tough in terms of growth in insurance premium due to the impact of dwindling oil prices.
“We’re waiting for the upcoming mandatory medical insurance and anticipating that this will help makeup investment losses that we’re going to incur this year,” he said.
Insurance penetration in GCC countries, including Qatar, is relatively very low against the developed countries or even compared to the global average.
Last month, speaking at the 10th edition of ‘Multaqa Qatar 2016’, Minister of Finance HE Ali Sherif Al Emadi noted that Qatar’s insurance sector has huge growth potential as the total volume of untapped insurance premium can reach up to $12bn (about QR43.70bn) or even more if the country achieves the insurance penetration level of 6 per cent of GDP, currently the global average.
According to latest available data Qatar’s insurance premium in 2015 accounted for little over 1 per cent of the GDP which stood at $2bn (about QR7.28bn) for the year.
Courtesy: thepeninsulaqatar.com
This is the system in the "West". No accident claims for a year and you get 10% reduction. This goes all the way down to 45%. And: if you have an accident claim you will pay 110% for the next year. And so on.
Insurance shall be based on the behaviour of the driver (i.e. tickets) and inssurance claims. Not to rise the premium to all drivers.
There isn't any real competition here
Where is the real competition to justify this!
They don't know what 'competition' means.
But if there's stiff competition, then surely prices should decrease and there should be wider array of products on offer...