Rising Insurance Costs Add to Citizens' Financial Strain

Rising Insurance Costs Add to Citizens' Financial Strain

Insurance Companies Have Decided to Pass on a Portion of Their Increased Costs to Their Customers

Alongside escalating loan installments, fuel and electricity prices, and the costs of products and services, citizens now face yet another financial hurdle. This year, they must grapple with hikes in vehicle and property insurance premiums. The reason? Insurance companies have decided to pass on a portion of their increased costs to their customers.

For households that own multiple vehicles—sometimes as many as three or four—the impact is palpable. Businesses, too, are feeling the pinch, especially those maintaining large vehicle fleets. These insurance hikes, coupled with rising fuel prices, are shaping up to form a costly predicament for the vast majority of citizens who own cars.

As Brief reports, in some cases, car insurance premiums have surged by 8% to 10% compared to last year. As a result, many should brace themselves for potentially higher renewal costs.

"Any Future Shifts Would Largely Depend on Market Dynamics and Emerging Costs"

Asked to comment on this trend to Brief, Andreas Athanasiadis, the General Director of the Cyprus Insurance Companies Association, pointed out that rising prices have indeed affected insurance companies. Some of them feel compelled to shift a portion of their added expenses onto their clients. Mr. Athanasiadis further explained that repair costs have surged by roughly 20% this year, primarily due to price hikes in spare parts and services. However, he emphasized that the current insurance premium increases only reflect a fraction of the costs shouldered by the companies, as they absorb the majority of them.

Concerning property insurance, Athanasiadis noted that rising construction material costs have led to increased expenses for insurance companies.

Athanasiadis concluded by highlighting that the Association had previously warned about these hikes. He reiterated that companies have only passed on a percentage of these increases to their customers, with the firms absorbing most of the costs. As for potential price changes next year, Athanasiadis remained non-committal, stating that any future shifts would largely depend on market dynamics and emerging costs. Making any premature predictions regarding insurance premium reductions or further hikes would be inadvisable at this stage.