Ongoing efforts to regulate the sector
There were 2,005 insurance brokers and agents until the end of June 2015, according to the Ministry of Economy’s published guide at the Official Gazette.
More than 1,500 are agents affiliated with insurance companies. Around 140 are independent brokers and 330 are brokerage firms.
Elias Hanna, Chairman of the Lebanese Insurance Brokers Syndicate (LIBS) said that the number of brokers has grown due to increasing awareness among clients, persistent security problems, and recent educational and training programs to improve the sector’s performance.
According to Hanna, “the syndicate is working with the ministry of economy and the Insurance Control Commission to come up with a modern insurance law.” The law would require insurance brokers to pass a technical test to receive their licenses.
The high yield is also one of the main reasons for the growth in the number of registered brokers, although it had been on the decline since 2005, when it represented around 29 percent of written premiums. In 2015, the commission earned by the broker averaged 13 percent. “More people are dealing directly with the insurance companies,” said Hanna. In life premiums, the average commission of a broker in life policies is around eight percent, in motor policies 26 percent, and medical 12 percent.
Joining the syndicate is not mandatory but talks with the Insurance Control Commission are underway to turn it into a requirement, according to Hanna. “This would regulate the sector even more,” he said.
Reported by Yassmine Alieh
Date Posted: Feb 08, 2016