Motor insurers in Singapore finally got themselves out of the red after suffering from five consecutive years of losses. Last year, the local motor insurance industry achieved an underwriting profit of S$21.2 million — the last time a profit was made was back in 2005. Over the past five years of losses, the largest loss of S$214.1 million was reported in 2008.
In its annual briefing last week, the General Insurance Association (GIA) revealed figures from the industry. Motor insurance still forms the single largest segment for general insurance, and the average premium collected from motor insurance rose by 2.5 per cent in 2011 to an all-time high of S$1,274. This average premium has been rising year after year since 2006 when it was S$867.
However, this average premium rise is tapering off and motorists, particularly the accident-free ones, can breathe easier. GIA president Derek Teo predicts motor insurance premiums will stabilise, with the possibility it may decline depending on the level of competition in the market.
The motor insurance segment made a turnaround due to several measures being implemented to deal with dodgy, overstated and fraudulent claims. For example, the Motor Claims Framework (MCF) was launched on 1 June 2008 and supported by all insurers in Singapore “as a best practice to provide clear and common procedure for reporting of motor accidents”.
Essentially, the three steps to take in times of a car accident are:
1) Exchange particulars with the other driver involved
2) Call your insurer
3) Report within 24 hours
It is also compulsory for insurers to do pre-repair inspections. A second phase to the MCF was launched on 2 February 2009, encouraging motorists to take photos of the accident scene, their own vehicles and any other damaged vehicles involved. In spite of these measures, only about 80 per cent of reported accidents in 2011 were reported within 24 hours.
A.K. Cher, convenor of the GIA motor committee, pointed out that there are still some things drivers are not commonly aware of:
1) The need to report to an accident repair centre within 24 hours under the MCF (no need for a report to the police)
2) The need for a report with the neighbourhood police if there is an injury
3) The need to report to the police, even if there is no injury, if a foreign registered vehicle is involved
Overall, the total number of accidents reported has fallen 9 per cent to 157,471 since 2008 but the number of accidents involving personal injuries has increased 18 per cent to 19,039 over the last three years. More alarmingly, one in five accidents involving personal injuries is caused by (not caused to) young drivers aged below 25 years.
“There is a need for public education to address this issue of young drivers. With the rising level of affluence in our society and couples choosing to have smaller families these days, drivers are generally getting younger and parents are more willing to let their children drive their cars or even buy them a car upon attaining their driving licence. We will be working with the National Road Safety Council to work out public campaign initiatives, but the education has to start from home too,” Teo added.
*This was first published on Yahoo!