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Yaoundé - 15 August 2022 -
Finance

Cameroon: Car insurance companies to increase the cost of services

Cameroon: Car insurance companies to increase the cost of services
  • Comments   -   Tuesday, 05 July 2022 14:19

(Business in Cameroon) - Car insurance companies in Cameroon entered negotiations with the government to increase the cost of their services. They say they were expecting the new price grid to be effective by July 1st.

“You may have noticed that some companies have experienced a shortage of insurance certificates. The reason is that car insurers hoped the new price scale would come into effect on July 1, 2022, before they receive new certificates from the Ministry of Finance. But authorities have not yet validated the increase requested,” a Yaoundé-based company explained. According to reliable sources, car insurance companies consider their activity marginalized with low revenues, although the cost of stamp duty was increased (from CFA100,000 to CFA150,000) for cars of more than 20 hp in 2021. Also, on June 1, 2022, the price of the technical inspection of a car doubled.

"Tax fees have increased, as have the revenues of the technical control centers. Insurance companies, on the other hand, which cover risks in the event of a disaster, did not see their revenues increase. We are rather facing more and more charges," an insurance operator denounced. He explained that per the price increase forecasts, the insurance of a 10-hp vehicle, for example, for a 2-month validity period rise from CFA18,000 to CFA30,000.

The price increase tendency in the car insurance sector is not confirmed by the insurance department of the Ministry of Finance and the Ministry of Transport. When questioned about the issue, officials in these administrations said they were not aware of such a measure.

The desire by car insurers to increase the cost of services comes at a time when the Ministry of Finance (Minfi) initiated the dematerialization of the control system for car insurance in Cameroon. Such a move is expected to bear several advantages, including the elimination of "automobile underpricing" which does not allow for the collection of sufficient premiums to settle claims; the exhaustive and instantaneous control of the applied rate; the identification of all victims, and the possibility to contact them directly; the online and individual monitoring of the settlement of each accident victim, as well as the instant evaluation of the claims reserves built up by each company.

On August 11, 2021, the Minister of Finance, Louis Paul Motaze, in a circular letter, enjoined the managers of insurance companies operating in Cameroon, to stop collecting the illegal levy of CFA1,000 from car owners for a subscription.

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