More UAE residents, firms delay insurance payments amid Covid-19, say experts
The impact of the outbreak is expected to be first realised in Q2 of 2020.
The UAE residents and businesses are increasingly delaying their insurance premium payments following job losses, salary cuts and slowdown in the economy since the outbreak of coronavirus.
The insurance industry executive say that delays in premiums are mainly from the businesses while health and life insurance segments are still doing well as people are more concerned about their health due to Covid-19.
Walter Jopp, CEO, Zurich International Life Limited, Middle East, says during these unprecedented times, there has been an increase in premium delays relating to premiums payments from customers that is due to loss of employment or salary reductions.
"While our policies have some inherent flexibility for such scenarios, they were further enhanced in response to Covid-19 and in consideration of financial challenges experienced by individuals in the region... We have provided some premium payment flexibility measures to customers who have contacted us and are experiencing financial difficulty during this period of Covid-19," said Jopp.
Hatim Maskawala, managing director of Badri Management Consultancy, noted that Covid-19 impact has taken many forms, including reduced business activities leading to a drop in topline business, fluctuations in interest rates, low investment returns or investment losses, delayed reporting and settlement of claims, and changes in claims frequency and severity based on the class of business.
He noted that the impact of the outbreak is expected to be first realised in Q2 of 2020.
Hitesh Motwani, chief marketing officer, insurancemarket.ae, says delays in premium apply the most to business insurance policy holders due to the impact of Covid-19 on their operations.
"Most business have not been operational during the lockdown/partial lockdown period and many of them have been impacted. Due to this, the overall payment situation has not been great," he said, adding that since business insurance policies are not always compulsory to have from a regulatory point of view, customers may look to avoid that, considering it an expense.
"However, we have seen the momentum continue in health insurance as consumers are now more conscious about having a comprehensive health insurance policy which covers them for any unforeseen health conditions. The same even applies to life Insurance policies," added Motwani.
On the other hand, car insurance premiums also dropped as the use of vehicles came down during the lockdown, which reduced the volume of claims, and subsequently the premiums," he added.
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