Egypt – The virus of cancellations affected life companies
Tuesday, 06 14 2016, Category: Insurance and Reinsurance, Country: Egypt
The virus of cancellations affected life insurance companies. The number of insurance contracts canceled increased from 68 thousand in 2014 to 76 thousand contracts in 2015, according to the official statistics issued by the Egyptian Financial Supervisory Authority.
Insurance companies’ leaders confirmed that the increase in cancellations is a dangerous issue and that insurance companies bear a part of responsibility. The marketing aspect is neglected, as the most important priority seems to be issuing new policies in order to earn commissions without caring about the continuity of the client in the company. They confirmed that the production staff did not fulfill properly their duties in explaining life contracts, so they just mentioned some benefits without mentioning the exclusions in order to encourage the client to buy coverage. Therefore, as soon as the client discovers the exclusions of the contract, he cancels it even if he will lose the settled premiums given that there is no advantage in continuing premium payments and getting investment returns lower than the inflation rates.
Source: Al Mal News