Under-pricing in motor insurance straining the market

According to AM Best, the outlooks of motor insurance in the Middle East are negative. The rating agency has revealed that very few countries are imposing an actuarial pricing of this class of business. The stiff competition in this segment has exerted pressure on insurers’ profitability.

Companies having a poor distribution network and inadequate rating methods are likely to run into difficulties on the mid-term basis. In countries like Jordan and Egypt, where minimum tariffs are in force, those rates remain too poor to balance the results of this business. Unfortunately in these countries governments remain opposed to an increase in the tariffs received by the population as an additional tax.

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