• Sun. Jul 21st, 2024

The actuarial study on automobile insurance pricing has been validated


Jun 30, 2023

BUJUMBURA June 30th (ABP) – The deputy chairperson the Insurance Supervision and Regulation Commission (CSRA), Mr. Charles Ntirampeba, proceeded, on Monday, June 26, 2023, to the opening of a validation of the actuarial study on car insurance pricing carried out by a consultant, a check by ABP revealed.

According to him, after the introduction of harmonized car insurance rates in 2021, complaints quickly accumulated with the regulator on the one hand, insurers speaking of civil liability insurance as a loss-making product, on the other hand, plaintiffs not compensated in accordance with the regulations and mechanics not paid after repairing damaged vehicles.

In that situation, he pointed out, the regulatory authority has always required as a prerequisite the conduct of a study to assess the financial performance of the motor insurance branch.

In commissioning the actuarial study on motor insurance pricing, he pointed out, the main objective sought by insurers and the regulator was to have at their disposal an analysis that assesses the complement of the branch of car insurance in Burundi while identifying the challenges it faces and assessing the adequacy of premium rates and claims burden to give concrete proposals

The CSRA deputy chairman pointed out that on November 15, 20022, the Insurance Regulation and Control Authority (ARCA) organized a meeting for insurance companies marketing automobile insurance, on the subject of automobile civil liability insurance rates, where it was decided to conduct an actuarial study on automobile insurance pricing as soon as possible.

The secretary general of ARCA, Mr. Joseph Butore, stressed that the funds collected by the insurance companies are not sufficient to compensate the victims, which means, according to him, that the rates will be increased.

The consultant who presented the report on automobile insurance pricing, Mr. Alain Moeglin, said that the insurance sector plays the essential role in the development of the economy, especially the transfer of risks and the compensation thus facilitating financial intermediation, the mobilization of savings as well as the facilitation of exchange and commerce.

In addition, he indicated that currently, the turnover of the insurance sector amounts to 75.5 billion BIF against 40.6 billion BIF in 2017, an increase of approximately 35 billion BIF corresponding at an average annual growth rate of 16.8%.

The penetration rate increased from 0.75% at the end of 2017 to 1.01% at the end of fiscal 2021, he said.

In addition, Moeglin specified that the balance sheet assets of the insurance sector continued to increase and stood at 248.8 billion BIF in 2021 against 165 billion in 2017, an increase of just over 80 billion