Small firms put pressure on short-term insurers - 11 Sep 2009 17:02
Small firms failing to pay their insurance premiums has put pressure on the revenues of many a short-term insurer, according to an article posted by Business Report. SMEs facing pressure from the economic crisis that began to bite in December last year has companies like Mutual & Federal.
Country-wide calamities such as fires and excessive rain has resulted in increased claims and the loss of insured properties. As a result, a first-half underwriting deficit of R96 million was experienced by the second largest short-term insurer in the country. Gross premium fell by 7 percent to R4.3 billion.
Similarly, Santam was unable to achieve proper premium rate increases for SMEs. The financial crisis has left the largest short-term insurer with two choices, offer lower premiums or lose clients.
Statistics SA confirmed the difficulty with their latest report of liquidated organisations. A hefty 35.8 percent more business closed down between January and July this year than during the same period last year. As a result, insurers have lost more than small premiums, but entire clients.
The solution until now has been close co-operation between brokers of SMEs and insurers to come to mutually agreeable terms for policies instead of forcing higher premiums and losing clients.
Small firms failing to pay their insurance premiums has put pressure on the revenues of many a short-term insurer, according to an article posted by Business Report. SMEs facing pressure from the economic crisis that began to bite in December last year has companies like Mutual & Federal.
Country-wide calamities such as fires and excessive rain has resulted in increased claims and the loss of insured properties. As a result, a first-half underwriting deficit of R96 million was experienced by the second largest short-term insurer in the country. Gross premium fell by 7 percent to R4.3 billion.
Similarly, Santam was unable to achieve proper premium rate increases for SMEs. The financial crisis has left the largest short-term insurer with two choices, offer lower premiums or lose clients.
Statistics SA confirmed the difficulty with their latest report of liquidated organisations. A hefty 35.8 percent more business closed down between January and July this year than during the same period last year. As a result, insurers have lost more than small premiums, but entire clients.
The solution until now has been close co-operation between brokers of SMEs and insurers to come to mutually agreeable terms for policies instead of forcing higher premiums and losing clients.