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HomeLatest NewsLínea directa anticipates increases in premiums for certain clients due to inflation

Línea directa anticipates increases in premiums for certain clients due to inflation

Date: March 28, 2024 Time: 20:36:00

The rise in inflation has destabilized the European economies after the start of the war in Ukraine a year ago now. Faced with such a scenario, Linea Directa Aseguradora has anticipated that they will carry out premium increases for certain clients in the coming months due to the higher costs generated by inflation, although the CEO, Patricia Ayuela, has ruled out general price increases.

“We are focused on recovering the technical margin, and that recovery (…) has to come because each client pays according to their risk, not making general increases or general decreases,” Ayuela said during the press conference after the publication of the annual results of the company. Despite this, the businesswoman has stressed that she is determined to maintain the average premium difference compared to the sector, which is 13% lower.

“We stick to our pricing policy, which is that we give each client a price based on their risk. We try not to mutualize between clients. This means that some clients whose risk has deteriorated will pay more; and other clients, whose risk has not deteriorated, they will not pay more”, Ayuela added.

In tune with the industry

Ayuela’s forecasts are in line with those made at the beginning of the month by the president of Mapfre, Antonio Huertas. After presenting his annual results, Huertas warned that more than half of the clients who have taken out insurance will see their premiums rise due to the increase in costs.

Línea Directa closed 2022 with a net profit of 59.5 million euros, which represents a decrease of 46%, despite the fact that premium income rose 4.4%, to 946.7 million euros. The decrease in profitability has been due to the increase in costs that has occurred “in the heat of inflation”.

The company’s combined ratio has experienced an increase of eight percentage points during the year, reaching 96.3%. This increase has been due to the increase in the accident rate, since the company’s expense ratio has remained practically unchanged.

Ayuela has pointed out that Línea Directa is an “austere” company and cost containment in general. Thus, the increase in the accident ratio has been common to the sector. The executive highlighted that the frequency, which is the indicator used by Linea Directa to measure risk quality, remains below 2019 levels.

Asked about an assessment of the Financial Client Defense Authority, the CEO wanted to underline that there is a difference between banks and insurers, and that the claims to the latter are usually of little import. For this reason, and because, according to her data, half of the claims are resolved in favor of the company, Ayuela has described as “excessive” that 250 euros are charged for each claim.

Looking ahead to 2023, the company has opted to accelerate growth, recover the technical margin by charging more to some customers, continue to control expenses and promote the digitization of the company.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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