Insurance premiums grow

All sectors are up except for motor and cargo

The insurance sector reported a 20 percent growth in premiums during the first quarter compared to the same quarter last year, according to the Association of Insurance Companies (ACAL). The premiums for Q1 2013 totaled $382 million, the highest value in the past eight quarters. Increases of premiums were concentrated in four business lines: life, medical, fire, and engineering. The number of issued contracts grew by three percent to more than 900,000 contracts.

According to Fateh Bekdache, General Manager of Arope Insurance, results of the first three months are not an accurate indicator of the sector’s actual performance over the covered period: “As a market player I was surprised by the figures because it is obvious that economic growth is not at its best.” He said results over the first three months of the year cannot be taken as a benchmark: “Renewals of contracts are not always consistent in terms of date, so for example if some clients renewed their policies a month ahead, the numbers will change. Plus you need to count inflation too.”

Medical premiums, which make up the biggest share of all premiums (33 percent), grew by 27 percent during that same period. Life premiums, the second largest premiums contributor (28 percent), rose by 36 percent. Fire premiums, which make up 8.5 percent of premiums, went up by 14 percent. Workmen premiums grew by five percent. According to Bekdache, the growth in medical premiums is motivated by competition among hospitals and clinics that offer high-tech services: “I would say medical policies prices went up by between ten and 25 percent.”

Motor and Cargo premiums fell by two percent and three percent respectively. Motor insurance accounts for 19 percent of all premiums. Non-compulsory premiums, which make up 82 percent of motor premiums, stood flat. Compulsory motor insurance contracts fell by 12 percent in number and by 15 percent in premiums’ value.

Total Net Investment Income of the sector stood at $24 million, down by 14 percent.