Hotels in Egypt are demanding lower premiums rates for insurance policies and to be allowed to pay premiums in instalments.
A insurance company source told Al Mal that a number of hotels are clamouring for premium reductions in respect of insurance policies, especially civil liability policies, after a significant decline in hotel occupancy during the period from 15 March to 15 May.
The source said that insurance companies, however, have refused to cut prices for property insurance policies that cover fire, theft, robbery, violence, terrorist acts and others. This is because insurers on their part face difficulties like the hardening of reinsurance rates.
The source revealed that the problem with instalment payments of premiums by customers is that insurers pay the reinsurance premium in full to reinsurers while they have to wait for premium payments from clients. This affects insurers' liquidity, particularly when claims have to be paid.
Mr Walid Fares, Tokio Marine Egypt General Takaful's chief underwriting executive, said that the requests for premium reductions are a temporary matter and do not constitute market-wide action nor a trend in the market. He said that there are hotel chains with several establishments scattered across Egypt.