Like other Lebanese sectors and institutions, insurance companies suffer from the repercussions of the economic crisis, the collapse of the national currency, and the multiplicity of exchange rates between those approved by the Banque du Liban, and that is the actual and predominant, which is the exchange rate in the parallel market or money changers’ shops and the seizure of the funds of the insured and insurance companies alike.
This prevents obtaining the full policy funds on the one hand, and puts insurance companies in inability to pay the dues of reinsurers on the other hand, which has caused the closure of many companies except for the existing disputes with the insured.
Speaking to "Sky News Arabia", the head of the Association of Insurance Companies, Elie Nisnas, said that the problems faced by insurance companies are similar to those suffered by other sectors, most notably the detention of funds in banks by imposing an undeclared "Capital Control", which prevents them from transferring amounts Due to reinsurers, in addition to inflating car repair costs in the event of accidents, or hospitalization bills, which raises the cost of receivables for insurance companies. Also, the multiplicity of the exchange rate made it difficult to determine the price of the insurance policy to adapt it to the purchasing power of the insured.
According to Nisnass, there are 50 insurance companies in Lebanon that employ about 4,000 employees, while the number of insured persons in the hospital sector is 750,000. On the other hand, and in his comment on the dispute over the payment of funds to the insurers affected by the explosion in the port of Beirut, Nisnass made it clear that no radical solution has been reached to date, and therefore, the insurance companies are waiting for the judicial decision that will determine the nature of the explosion, if it is an act of war so that it cannot be compensated. Except for the insured against military actions, or if it resulted from an accident, then the damages resulting from it are covered, and this matter depends on the type of policy purchased by the customer and the nature of the events covered. Nisnas pointed out that some insurance companies paid small accidents in the range of 25 to 50 thousand dollars, part of which was paid in cash dollars, and the amount paid amounted to 120 million dollars out of a serious damage cost of 1.2 billion dollars, which equals 12% of the value of the amount.
For his part, an expert in the field of insurance, Suleiman Hobeika, explained to "Sky News Arabia" the nature of the relationship between insurance companies and reinsurers and between insured customers. He made it clear that the insured has nothing to do with the relationship between the insurance company and the reinsurers. As for the issue of reinsurance in cash dollars, insurance companies pay cash dollars to reinsurers. As for clients who are insured with insurance companies, any accident they are exposed to is covered according to the currency that was agreed upon when concluding the insurance contract. If the insurance is in Lebanese pounds, it is paid to the insured in Lebanese pounds, and if the contract is in dollars, it is paid to him in dollars.
According to Hobeika, insurance companies are unable today to pay the full dues to reinsurers due to the collapse of the lira and the inability of the insured to pay the price of the insurance policy in US dollars, so the number of reinsurers interested in the Lebanese market has decreased.
Regarding the problems between hospitals and guarantor companies, he said that hospitals demand insurance companies to pay their dues in cash dollars and control the hospital bill whenever the exchange rate of the dollar changes, while they are still paying their dues from salaries and others at the official exchange rate, i.e. 1500 pounds, and today they are paid on the basis of 3900 pounds.
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