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22 February 2024

Corporates increase insurance spend on exposure concern

Albert J Rodrigues, Managing Director, Millennium Insurance Broker (SUPPLIED)

By Shveta Pathak

Corporates have increased their insurance spending by an estimated 10 per cent to 15 per cent amid worries over high exposure to risk, said a senior official of an insurance services provider.

"Spending on insurance has gone up by 10 per cent to 15 per cent mainly because of various types of losses and increased exposure to risk," Albert J Rodrigues, Managing Director of Millennium Insurance Broker, told Emirates Business.

Not only are companies going in for higher covers, they are also going in for different types of insurance which they were not keen on during the boom days.

While insurance companies have not really come out with new products to deal with increased demand, consumers are now going in for insurance for varied reasons like protecting themselves from frauds, embezzlements, defaults etc. Rodrigues said businesses still had a low appetite for risk. Among the sectors that are facing maximum risk is construction.

Even as there is no discernible rise in overall claims, those related to credit risk insurance has risen by 30 per cent, said Rodrigues.

In spite of heightened risks, what is more important is managing risk, he said.

"In the current scenario, people should control and manage the risks in the first place. Insurance will come later. They should not forget the significance of streamlining their procedures and ensuring that thing are handled well in the first place."