The Cost of Insurance Premium increases disproportionately
SANTAM said that the increased cost of insurance premiums to protect the claims costs are unusually high because of flooding in SA. “This week, the premium client has been stabilized and can be enjoyed in the last year”, CEO Ian Kirk said. Last year, the unexpected severity of flooding and damage to place more than R2bn. Reinsurance costs and the level of claims affect insurance premiums so that the higher the claim the more likely this sector will get the price risk of future claims by raising premiums.
The insurance companies worry about losing customers and market share due to a disproportionate increase in premiums. Mutual & Federal MD Peter Todd explained that this week, an increase in premiums is determined by a mixture of the hands of an insurance business. He added that Mutual & Federal has seen the “adjustment under the” premium in the commercial sector so that the downward trend has not been as much in the commercial space despite floods and other natural disasters are factors that are known.
If you have a good business then you will find better ways to manage exposure. In the annual report Santam, Mr Kirk said that insurance has a lot of claims as a result of flooding. He also said that as a result of premium increases this year inevitable. “But the cost of reinsurance may increase next year as reinsurance prices in the cost of natural disasters,” Mr. Todd said.