InsiderBusinessInsurance companies face rising costs from road accidents

Insurance companies face rising costs from road accidents

Insurance companies have to bear the costs of the ever rising number of car and motorcycle accidents in Cyprus – a phenomenon which is taking on alarming dimensions.

Association of Insurance Companies data shows that car insurance represents 36% of total non-life insurance premiums.

In 2018, gross motor insurance premiums amounted to €188 million compared to €181 million in 2017. This represents a 4% increase. In 2018, total claims amounted to €116 million.

This represents a 2% increase compared to 2017. The gross ratio of claims decreased to 67.3% in 2018 compared to 68.4% in 2017. The ratio of gross claims in Cyprus remains below the European average of 78%.

Car insurance premium requirements, including traffic, theft and fire, have been on the rise since 2014 and is indicative of the state of play of costs of car accident on the roads of Cyprus.

Net claims paid by insurance companies in 2014 were €100 million, rising by 4% to €104 million in 2015. Insurance companies paying off claims in the following years was a figure consistently going upwards.

In 2016, claims paid amounted to €107 million, that is, up by 3%. In 2017, claims paid increased to €114 million, up by 7% year-on-year. A similar situation was recorded in 2018, when claims paid increased by 2% to €116 million.

A record breaking year was 2010 with net claims reaching €140m, that is, an increase of 11%. In 2011 and 2012 net claims for each year totalled €126 million.

The year with the lowest payments was 2014 with the amount reaching €100 million and recording a 15% decrease over 2013.

The Association’s data also shows that the combined claims ratio has been rising since 2015. The indicator takes into account both claims and related costs in relation to premiums. The index fell below 100% in 2003 and remained below this level until 2006.

The combined ratio exceeded 100% in 2007 and has remained above that level ever since. 2018 stood at 107%.  Based on data available for the first half of 2019, Limassol has recorded the highest number of accidents which was 38, none of which was fatal.

In Nicosia and Larnaca the number was 23 for each city, 20 for Paphos 20 and 8 for Famagusta.

Read more:


Top Stories