MOTOR INSURANCE

Press, Volume LXXII, Issue 21941, 16 November 1936, Page 3

MOTOR INSURANCE

FIVE BRITISH COMPANIES FAIL Some very interesting information on motor insurance was provided in the House of Commons recently. It was given by the President of the Board of Trade in the form of a table, and was in answer to a question calling for information as to the causes which led to five insurance companies going into liquidation since the passing of the Road Traffic Act, 1930. The first act, of importance to record is that 214,091 motor owners became uninsured through the insolvency of the five companies. To these motorists important lessons are to be derived from the causes of insolvency. They are set out as follows;—(1) Insufficient capital, and heavy claiins. (2) Bad underwriting, and insufficient reserves. (3) Insufficient capital, indiscriminate underwriting, and insufficient rates of premium. (4) Under-capi-talised for business underwritten, and heavy claims from third-party risks, the premiums having been payable .by instalments. (5) Heavy claims in the motor department during the last 18 months of the company’s existence, and, according to former officials qf the company, excessive damages awarded by juries in motor accident cases and solicitors’ costs. The total deficiency (excess of liability over assets) of all* the five companies was £1,012,357,