Friday, 17 September 2021 12:12 GMT

Loss of claims due to COVID 19 blockades, insurers smile.


(MENAFN - Soporte Digital SAS )

To acquire a car insurance in South Africa is a compulsory action when owning a car. Moreover, vehicle owners who are insurance holders affirm the benefits this brings to their lives. The search for a fully comprehensive policy is carried out by specialized brokers who are in charge of finding policies which fit the specific needs of each citizen. This has been a win-win situation for many years. However, as from 2020 the scale has slightly tipped towards one side.

The past year, administrations around the world imposed a great number of measures to make sure that the citizens in their countries would be protected during the Covid-19 pandemic spread. South Africa was part of the many countries which imposed lockdown restrictions to lower the number of infected people by the virus. Nowadays, restrictions have been loosened while the vaccine is being distributed worldwide, and countries are getting ready to ensure growth and economic recovery in their territories. Nevertheless, governments of the world are certain that societies are not going to reach a pre-pandemic status any time soon, if they ever do. There are many aspects which seem to have changed for good in what many call the “new normal”.

Several social aspects are part of this latest configuration of communities. South Africans experienced a great number of restrictions, like for example alcohol prohibitions, as well as regulations requiring people to remain indoors between specified hours, among others. Another clear example of these restrictions was the switch to remote working when offices had to close their doors. That is why people who used to commute long distances to arrive at their place of work, are now working from home. This situation has brought in turn a new “game” into the insurance business. When driving to the workplace every day, car owners used to be likely to encounter potential dangers to their vehicles and themselves, for instance a possible number of car accidents, car hijackings and other hazards. One of the reasons for the loss of claims to insurance companies is related to this situation. The more people work from home in a remote way, the less likely they are to need to make a claim to their brokers.

This panorama has brought many advantages to insurance companies. They had given insurance holders discounts on their premiums at the beginning of the pandemic, but still the claims ratio is much lower than it used to be, giving them a favoured position.

A number of changes may be necessary in the future if the situation continues, market competition will inevitably lead to a logical reduction in the price of premiums. It is a fact that, no matter the social or economic situation, people owning a car will continue to pay insurance premiums to protect themselves, their families and vehicles. The following decisions about finance made by, not only governments, but also companies and individual citizens will be directed by taking into account the new status of many which is remote working from their own homes.


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