Praneeta Prakash 
[Photo: FILE]
The Reserve Bank of Fiji says, although insurers recorded strong $70.8m profits in 2024, motor vehicle insurance is under pressure from rising claims and repair costs.
Reserve Bank of Fiji Governor Ariff Ali told the Standing Committee on Foreign Affairs and Defence that the sector has been affected by a rise in road accidents, which has led to a higher volume of claims and increased payout levels.
Ali says insurers are grappling with higher repair expenses, driven largely by the rising cost of imported vehicle parts and components required for vehicle repairs.
“We have more cars on the roads. We have more accidents. We have more new cars where the parts are extremely expensive, and they have to air freight it. So this is really impacting the cost of insurance. The cost of insurance is not driven by global factors in this case. It’s driven more by domestic factors, whereby we have more accidents, and the cost of repairs has really gone up.”
Ali says insurers are adjusting premiums mainly due to increased claims and higher repair costs.
“The cost of insurance is not driven by global factors in this case. It’s driven more by domestic factors, whereby we have more accidents, and the cost of repairs has really gone up. If you go and talk to Asco Motors, one of these car dealers’ repair shops, they’ll tell you that they’ve lost a lot of people over the last couple of years. They now have to pay more for their thing. So that is driving up the insurance premium.”
Ali says that despite the pressure in the motor vehicle segment, the industry remains well-capitalised, with a solvency surplus of $688.5 million recorded in 2024.
Praneeta/AW
