12 September 2018 07:00
Photo : Freepik
Sales of insurance policies of replacement have experienced a rise in 2017, says the annual Report on the financial institutions, 2017 theAuthority of the financial markets.
In 2016, nearly 109 000 fonts have been subscribed for more than $ 182 million ($Million) of premiums. A year later, this figure amounted to almost 116 000 for nearly $ 197 Million in premiums.
The auto insurance policy replacement insurance (QPF#5) can be distributed by brokers and insurers, but also by auto dealers, who act as their own distributor. Although the dealers have a larger market share, the proportion is falling year on year.
In 2017, the proportion of the premiums written by these was of 81.7 %. It was 83 % in the previous year. Sales for 2017 have also decreased in the dealers. A total of 73.2 per cent of sales of the police have been made by dealers last year, the proportion rose to 74.7 %.
Insurers distributing this insurance policy through representatives certified have experienced an increase in total policies sold in 2017 for a sixth consecutive year. They now hold 18.3% of total premiums written, compared to 17% in 2016. For policies sold only in 2017, sales at the insurers amounted to 26.8% of the total, compared to 25.3 % the previous year.
Average premium : the gap remains substantial
For this relates to the different distribution models, the deviation from the average written premium is always important in 2017. The Authority reported that there was a gap of $ 735, or 63 %, between the mode of distribution without a representative (1 897 $), and one through a certified representative (1 162 $). However, this gap has slightly decreased in contrast to 2016 where the gap was 65 %.
“This decrease is explained by the fact that the average written premium of insurers doing business with auto dealers increased 1.9 %. That of insurers distributing the font through representatives certified increased by 3.2 %, ” says the financial markets Authority.
The Authority reviews complaints
The Authority decided to tighten the requirements for the dealers, which make the distribution of replacement insurance and insurers. Many consumer complaints have prompted the regulator to act.
Among other things, the Authority eliminates the option of compensation for replacement of the vehicle through the named dealer from December 1, 2018. According to the regulator, it is sometimes the only option presented to the consumer and that it was selected by default in the proposal form of insurance.
The compensation is also covered by the changes made by the Authority. Thus, dealers will not be able to distribute a range of products that offer similar protections, but for which the compensation is different.
The Authority also requires insurers to train the representatives on the insurance products, legal and regulatory obligations, the complaints policy, the business practices promote the fair treatment of the consumer and how to submit a claim and the deadline for doing so.
The insurers will also have to ensure that the staff assigned to the supervision of the compliance is independent of the one who does the sales follow-up and that it does not receive any variable compensation in connection with the sale of insurance products to dealers that it oversees.