Assuralia warns for higher premiums

Assuralia, the fraternity of insurance companies, has announced an increase of the premiums, due to the current financial crisis.

The income of the insurer is going to suffer a descent because of the declining interest rate due to the terrible situation at the stock market. A life insurance offers a guaranteed return of 3,25 per cent at the end of the running time. On the other hand the results of the investments done by the insurance companies are less than 3,25 per cent. The conclusion? The insurers find it very difficult to stay lucrative.

Besides the decrease of the income, the insurance companies face a disappointing sale of some of their life insurance policies. People don’t want to invest money for a long period, but they want it to be always and immediately available. This happens when a crisis appears because people are very anxious.

The increase of the insurance premiums will probably carry through on the hospitality insurance policies and the car insurance.

Christian Defrancq, president of Assuralia, is completely honest about the situation at the insurance market. The decision to increase the premiums is not yet made but according to me it is good because people are informed and they know what can happen. With the financial crisis, people lost their faith into every company that manages and invests its money. One of the reasons of losing their faith into finance companies is that no one has told them what was going on till it was too late and banks went bankrupt. So it is logical that panic broke out.

At this moment, in this terrible economical situation, people want their money nearby. They want to feel their money in their pocket. So it is logical that people will only invest in brief term products than in long term products. Maybe when this crisis is dissolved, they would have more the intention to invest in long term products.



Sofie De Cooman

Source:
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