Cameroon: Car insurance companies will increase the cost of benefits

(Business in Cameroon) – Car insurance companies in Cameroon have started negotiations with the government to increase the cost of their services. They say they expected the new fee schedule to be effective by July 1.

“You may have noticed that some companies have experienced a shortage of certificates of insurance. Indeed, car insurers hoped that the new fee schedule would come into force on July 1, 2022, before receiving new certificates from the Ministry of Finance. But the authorities have not yet validated the requested increase,” explained a Yaoundé-based company. According to reliable sources, motor insurance companies consider their activity marginalized with low incomes, although the cost of stamp duty has been increased (from 100,000 FCFA to 150,000 FCFA) for cars over 20 hp in 2021. Also, on June 1, 2022, the price of a car’s technical inspection doubled.

“Fiscal fees have increased, as have revenues from technical control centers. Insurance companies, on the other hand, which cover risks in the event of a disaster, have not seen their income increase. We are rather faced with more and more charges,” denounced an insurer. He explained that according to the price increase forecasts, the insurance of a vehicle of 10 horses, for example, for a validity period of 2 months goes from 18,000 FCFA to 30,000 FCFA.

The upward trend in prices in the motor insurance sector is not confirmed by the insurance directorate of the Ministry of Finance and the Ministry of Transport. When questioned on this subject, the officials of these administrations declared that they were not aware of such a measure.

The desire of car insurers to increase the cost of services comes at a time when the Ministry of Finance (Minfi) has initiated the dematerialization of the car insurance control system in Cameroon. Such a decision should have several advantages, including the elimination of “automotive underpricing” which does not allow the collection of sufficient premiums to settle claims; exhaustive and instantaneous control of the rate applied; the identification of all victims and the possibility of contacting them directly; online and individual monitoring of the breakdown of each accident victim, as well as instant evaluation of the claims reserves constituted by each company.

On August 11, 2021, the Minister of Finance, Louis Paul Motaze, in a circular letter, ordered the leaders of insurance companies operating in Cameroon to stop collecting the illegal levy of 1,000 FCFA from car owners for a subscription.

HER


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Justin D. O'Neill