Egypt – Competition is burning “Fire” insurance
Tuesday, 09 15 2015, Category: Insurance and Reinsurance, Country: Egypt
The frequency of fire accidents increased in the past period due to the insecurity. Moreover, property owners are not respecting safety standards in order to limit fire losses, in addition to meteorological factors and temperatures exceeding their natural levels.
From another perspective, despite the fact that insurance is supposed to diminish and prevent the risks by anticipating losses and limiting them, insurance companies, or at least a large number of them, contributed directly in increasing the frequency of losses, for technical reasons, including the inadequate technical underwriting of insurance risks. Usually such insurers are trying to achieve their premium targets without taking claim costs into consideration, so they follow aggressive price competition without respecting technical criteria. This in turn will threaten the financial position of companies in the medium and long term in case they will continue this policy ignoring the catastrophic consequences.
Source: Al Mal News