The difficulties of the times have increased dramatically the fraudulent claims from the insurance companies, Chairman of Insurance Companies Association, Philios Zachariades stated on Wednesday in the context of the insurers’ general meeting.
“The insurance industry suffered one of the most difficult years in 2011 not only due to claims from the Mari explosion but also due to pressures from the ongoing crisis.
Focusing on the problems, Mr. Zachariades said that the dramatic increase in fraudulent claims, in car sector mostly, has hit the insurance companies.
“The fraudulent claims with the cooperation of a small portion of disreputable professionals from the sectors of health and car repair, makes it extremely difficult to effectively address the problem”.
“Unfortunately, they submit claims for damages from staged road accidents and exaggerating injuries, the authenticity of which cannot be ascertained”, Mr. Zachariades said.
At the same time, he outlined that “the effects from the sharp increase in false claims burden not only the insurance companies but also the law-abiding customers, who are called to pay higher premiums to cover the serious cost of fraudulent claims”.
Elsewhere in his speech, Mr. Zachariades said that despite the negative economic environment, the insurance industry recorded an increase of 5% in its turnover in 2010. A smaller increase is observed in 2011.
The sector showed losses of €19 million due to problems from the crisis.
As for the new Solvency II directive, he said that the effort to adjust the industry to the increased capital and other requirements of the new EU directive will be approved in 2013 and will become fully effective in 2014.
Mr. Zachariades appeared optimistic for the course of the sector in 2012, stressing that the economic problems will affect the insurance industry too and will be reflected in its results.
Mr. Zachariades asked by the state to address the challenges that the sector faces, such as pensions.
The Mari explosion was the largest insurance loss from human energy in Cyprus, he said.
Speaking to the 34th Annual General Meeting of the Association, Mr. Zachariades emphasized that the insurance industry has responded promptly and adequately to this huge challenge not only in relation to EAC and the relatives of the victims but also in their policyholders whose properties have suffered damages, the compensation is calculated beyond €360 million.
Defending the profession, he said that via Mari insurers gave tests of reliability and professionalism and passed them successfully.
He said that the state’s strategy against the insurance industry is inadequate.
“In sectors such as those of health and pensions, the private sector could offer supplementary and invaluable services for the strengthening of the state’s role. With an appropriate tax relief, people could enjoy supplementary private pensions and medical insurance. They would contribute significantly to increasing the standard of living of the Cypriots”, he said.
Chairman of the Association finally said that the extensive involvement of the industry in pension benefit services and medical coverage would relieve drastically the public finances.
“The insurance industry suffered one of the most difficult years in 2011 not only due to claims from the Mari explosion but also due to pressures from the ongoing crisis.
Focusing on the problems, Mr. Zachariades said that the dramatic increase in fraudulent claims, in car sector mostly, has hit the insurance companies.
“The fraudulent claims with the cooperation of a small portion of disreputable professionals from the sectors of health and car repair, makes it extremely difficult to effectively address the problem”.
“Unfortunately, they submit claims for damages from staged road accidents and exaggerating injuries, the authenticity of which cannot be ascertained”, Mr. Zachariades said.
At the same time, he outlined that “the effects from the sharp increase in false claims burden not only the insurance companies but also the law-abiding customers, who are called to pay higher premiums to cover the serious cost of fraudulent claims”.
Elsewhere in his speech, Mr. Zachariades said that despite the negative economic environment, the insurance industry recorded an increase of 5% in its turnover in 2010. A smaller increase is observed in 2011.
The sector showed losses of €19 million due to problems from the crisis.
As for the new Solvency II directive, he said that the effort to adjust the industry to the increased capital and other requirements of the new EU directive will be approved in 2013 and will become fully effective in 2014.
Mr. Zachariades appeared optimistic for the course of the sector in 2012, stressing that the economic problems will affect the insurance industry too and will be reflected in its results.
Mr. Zachariades asked by the state to address the challenges that the sector faces, such as pensions.
The Mari explosion was the largest insurance loss from human energy in Cyprus, he said.
Speaking to the 34th Annual General Meeting of the Association, Mr. Zachariades emphasized that the insurance industry has responded promptly and adequately to this huge challenge not only in relation to EAC and the relatives of the victims but also in their policyholders whose properties have suffered damages, the compensation is calculated beyond €360 million.
Defending the profession, he said that via Mari insurers gave tests of reliability and professionalism and passed them successfully.
He said that the state’s strategy against the insurance industry is inadequate.
“In sectors such as those of health and pensions, the private sector could offer supplementary and invaluable services for the strengthening of the state’s role. With an appropriate tax relief, people could enjoy supplementary private pensions and medical insurance. They would contribute significantly to increasing the standard of living of the Cypriots”, he said.
Chairman of the Association finally said that the extensive involvement of the industry in pension benefit services and medical coverage would relieve drastically the public finances.
3287.99
1275.09
