6 September 2017, 07:00
Car insurers have recorded their first-year deficit for a long time in 2015. And 2016 continues in the same downward slope.
According to the annual Report on the financial institutions 2016 of thefinancial markets Authority, the estimated annual loss of motor insurers in 2016, accounting for 2.4% of earned premiums. This is a second consecutive loss for the industry.
For what is the average earnings for periods of ten and twenty years, there has been a decrease in 2016 for these two periods. The operating income generated by all insurers for the period of ten years, including the years 2007 to 2016, amounted to 7.9% of earned premiums compared to 9.8 % in 2015. When it is calculated over a period of twenty years, the operating income is of the order of 8.6 % of premiums, while it was 9.1 % in 2015.
The Authority added that the results of motor insurance, which accounts for 3.5 billion dollars (G$) direct premiums earned, or 37.4 % of the total direct premiums earned of 2016, deteriorating constantly for several years. Their ratio rose from 57.4 % in 2010 to 70.6 % in 2016.
«This decline in profitability was driven in part by strong competition which leads to lower rates for many segments of this category. Thus, the car insurance in a whole is in deficit for a second consecutive year «, one can read in the report of the Authority.