Poor uptake of property insurance despite storms
However, because of a longstanding market practice, policy-holders tend to get lax in paying their premiums, while taking advantage of credit terms. But when hit by a storm, they want their claims to be speedily settled in order to rehabilitate their properties. At this point, the reinsurer points out to the insurance company that the claim cannot be settled unless the premium is paid in full. Inevitably, the settlement process stalls at this point.”
Given the rising frequency and growing threat from natural disasters, some insurance companies have urged the regulator to make it compulsory for property owners to pay their premiums upfront when obtaining coverage for their holdings.
“This measure will help all the parties concerned — the insurance companies, brokers, reinsurers and the insured as well. With places like Salalah hit by backto-back cyclones and tropical storms — and with such natural events set to occur at a more frequent interval — it becomes necessary for property owners to pay their premiums in full at the time of the policy being written up. This way, they are not only secure, but any claims will be settled promptly,” he added.