The lack of liquidity in the auto insurance sector, coupled with the summer holiday season, have fueled competition among insurers to reduce prices.
Industry executives are talking about the market’s return to price undercutting, with insurance companies offering discounts on policies such that premiums are below the minimum set by the authorities, reports Al Roeya.
Industry experts say that the pursuit by marketing staff to achieve their sales targets plays a key role in the current situation, prompting them to abandon part of their commissions.
Mr Saeed al-Muhairi, CEO of United Gulf Insurance Broker, explained that the UAE Insurance Authority allows discounts to be given to policyholders with a clean record, but the market is affected by some insurers which are granting such discounts in an uncontrolled manner.
A sales manager with an insurance broker said that the low level of demand for insurance in the summer has led salespeople, seeking to achieve their sales targets, to reduce commission margins in an effort to lure business.