Collecting Insurance Premiums More Difficult Than Before: Experts
Many difficulties face insurers nowadays in collecting premiums due to the bad economic situation which made many customers refrain from seeking insurance coverage or demand reducing the value of insurance premiums. Insurance experts revealed the main reasons behind this matter and recommended a number of solutions.
Abdel Raouf Kotb, Chairman of Insurance Federation of Egypt and Managing Director of Egyptian Saudi Insurance House, said the Egyptian insurance sector faces difficulties in collecting premiums for many reasons. Firstly, many customers have been in default which affected the volume of premiums. Besides, no new investments entered the Egyptian market from about a year and half and large investments exited the market. These investments were paying premiums that had contributed to boosting the insurance sector. Tourism companies were the most affected sectors by the aftermath of last year’s revolution. However, Kotb suggested that insurance companies can avoid such difficulties through offering payment facilities for customers in order help them pay the premiums.
Hussam Abdel Rehim, Managing Director of Al-Ahly Insurance Brokerage and Deputy Chairman of Egyptian Insurance Brokers Association (EIBA), expected the economic situation to improve in the upcoming period as the volume of investments increases. Abdel Rehim noted that imposing compulsory insurance were not broadly spread; therefore, customers considered insurance coverage unimportant. Contracting with Post Authority, NGOs and e-payment companies will increase the volume of insurance premiums as they will be collect more easily than the premiums collected from individual customers, Abdel Rehim expected.
Mohamed El-Ghatrefy, the Chairman and Managing Director at Red Sea Insurance Brokerage, affirmed that the Egyptian insurance sector faces obstacles in collecting premiums as the sector has been affected directly by the economic situation of the country as it depends mainly on the large projects and factories. El-Ghatrefy explained that the country’s bad economic situation drains liquidity.
