2023-05-02 05:06:10
L’inflation is also a concern for the insurance industry. The increase in the price of automobile parts is in fact subjecting companies to a significant increase in repair costs in the event of claims. “The cost of parts has increased a lot. For example, windshields have seen their price increase between 45 and 50%”, confirms Bachir Baddou, Managing Director of the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR). And to clarify that inflation has no impact on bodily insurance. But that it is “a real subject on the repair of material damage”.
Towards an increase in car insurance prices?
In several other sectors, particularly industrial and retail, the reaction of business leaders has been to increase prices in order to pass on, more or less quickly, part or all of the rise in costs to the consumer. In the insurance sector, operators still seem to resist this temptation, thus having inflation absorbed by their margins or at least what is left of them.
This phenomenon can be explained by the strategic nature of this extremely competitive branch for companies. “As for prices, you should know that the market is very competitive. This is what slows down the rise in premiums., explains Bachir Baddou. In this context, it will be difficult for an actor to raise these prices at the risk of losing customers. But the situation can change at any time if inflation becomes lasting. “If inflation persists, I would not be surprised to see the price of property and casualty cover increase with certain insurers during the second half of the year”specifies the Director General of the Federation.
At the same time, in his interview granted to Finances News in this same issue, the president of ACAPS, Othmane Khalil Alamy, invites insurers to anticipate inflation correctly. Because otherwise “this could lead to under-provisioning, especially for branches with long development.”
Dematerialization of insurance policies: The FMSAR wants to act quickly
The dematerialization of insurance policies is a major change that the sector should experience. The FMSAR, which is behind this project, wants to move quickly and bring it to fruition this year if possible. In addition to the improved customer experience, this project will improve company processes, make the agent-insurer relationship more efficient and reduce insurance fraud. “We are certain that this will help simplify processes, especially with the distribution network”explains with great enthusiasm the Director General of the FMSAR.
Concretely, continues Bachir Baddou, “today, an agent in a remote town receives the blank certificate that he edits himself, then sends a physical copy to the company. The document flow is very important, which increases operational risks. Dematerialization will improve these processes”.
During the Casablanca Insurance Meetings, held a few weeks ago, Mohamed Hassan Bensalah, president of the Federation, had abounded in the same direction, describing this modus operandi as archaic. The other contribution of dematerialization is the acceleration of online sales. “Countries that have taken the plunge are benefiting today”, says Bachir Baddou. The FMSAR hopes to see this site operational this year. But before that, there is a regulatory aspect to be managed by ACAPS. “We sincerely hope to have by the end of the year a decree, a circular or an instruction that can allow this dematerialization and lead to an end-to-end online sale”concludes Bachir Baddou.
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