Insurance sector grows
in premiums and profits
On top are life and medical
insurance followed by motor
The insurance sector achieved positive results in terms of profits, assets, and shareholder equity in 2014 compared to the year before, according to the latest Market Annual Report by the Association of Insurance Companies in Lebanon (ACAL), released last week.
The consolidated net income of insurance companies jumped 24 percent to $142 million. Jamil Harb, Secretary General of ACAL, said that one of the main factors enabling sector profits to swing from a contraction in profits in 2013 to a 24.2 percent increase in 2014 was the narrowing of deficits in motor insurance. Assets expanded to $4.3 billion, up by seven percent compared to 2013. Premiums grew by 4.6 percent to reach $1.5 billion. Harb said: “Insurance companies are applying new rates and deductibles.”
Life insurance continued to incur the lion’s share of profits, accounting for $92 million, or 65 percent of total profits. It is followed by life insurance ($11.3 million) and medical insurance ($9.4 million). Motor insurance remains a losing business, but the deficit is narrowing from $13.8 million in 2013 to only $60,000 in 2014. “People who are buying cars are paying more attention to the insurance premium as most companies now have their own body shops,” said Harb.
Contributions to the annual premiums were led by the life insurance business with $432 million, or 29 percent of total premiums. These were followed closely by medical premiums, valued at $426 million. Motor insurance was the third main contributor with $337 million.
Credit insurance saw the highest premiums growth, at 14 percent year-on-year. It was followed by fire insurance with nine percent.
Contractions in premiums were reported for engineering premiums, which dropped by 32 percent and civil liability, which shrank by five percent.
Consolidated shareholders’ equity of insurance companies grew by around seven percent to reach $1.05 billion. Paid-up capital increased by about one percent to $411 million and technical reserves reached $1.95 billion, growing by eight percent.
Insurers paid $761 million in claims and benefits, up by five percent.
Reported by Yassmine Alieh
Date Posted: Dec 29, 2015