THIRD-PARTY RISK

Evening Post, Volume CXII, Issue 49, 26 August 1931, Page 8

THIRD-PARTY RISK

WOEKINGS OF SCHEME

PREMIUMS AND BENEFITS

The opinion that it is yet too early to make any definite pronouncement in regard to tho third-party insurance "risk scheme is expressed in tho annual report of the Transport Department, which was presented to Parliament yesterday. "Although this. Act is much more complete in its provision for insurance of third parties injured' or killed by negligent motorists than any other similar enactment of which tho Department is aware, tho case of a third party who is injured or killed by a motorist of the 'hit and run' typo is not covered by the Act unless tho motorist is subsequently located," states tho report. "The insurance companies are not desirous of taking advantage of this fact, and an agreement, to be signed by all of the companies accepting risks and by the Minister of Transport, has been finalised and will bo gazetted, laying down the procedure to bo followed to obtain compensation in such cases, proof of negligence by the motorist being, of course, an essential ingredient in all these accidents. "For tho year ended 31st.May, 1930, forty-tw,o insurance concerns gave the prescribed notice to undertake business under the Act and carried on business accordingly. The premiums for the year, excluding, of course," any relating to-the 1930-31 licensing year, amounted to £240,630 17a 9d, after taking into account adjustments between the insurance concerns and the insured on account of extra premiums and refunds due to'changes in the classification of the vehicle and the cancellation of registrations. The commission of the Post and Telegraph Department, at the -rate of 6d per transaction, amounted to £5,624 7s 4d, l&v----ing a balance of £235,006 10s sd. . . "Claims .settled during the year,; in-' eluding costs, amounted to £84,959 18s 6d,-while the liability in respect of outstanding claims at the 31st May, 1930 (including costs), was estimated by the concerns carrying on the third-party business at £97,950 Bs.6d. Assuming that this estimated liability will eventuate, this means .that the total paymerits on account of compensation (including costs) will amount to £.182,910 7s, or 77.83 per «cut." of the net total of premiums received. TOO EARLY FOR CONCLUSIONS. "Attention is specially directed to the fact that the statistics cover the period of one year only, and must be interpreted with the utmost caution.' I is quite impossible to state to what extent they represent normal- or abnormal ■ conditions. Experiehc'e; over a longer ■period is the only way/" of figures that will .be^typical' of the thirdparty business in allots ramifications. The developments of the scheme are being closely studiod with a-view to ensuring that due equilibrium is maintained between premiums and benefits, but definite conclusions cannot .be reached until more experience hias'been recorded. . ;; \ ■■■;■■■■. . >

"It is of interest to note that the percentage ratio of claims actually paid (including costs) to premiums for all classes of insurance undertaken in accordance with the provisions; of the •Accident Insurance Companies Act, •1908—accident (including motor accidents), disease; 'employers* J' -^liability, etc—was 51.75, 49;32, 54.03, 57.98, and 60.62 per cent, respectively for the five calendar years ending with 1928. As the outstanding claims for any particular year would.be. paid during the succeeding or subsequent years, these figures are comparable, up to a point, with those for tho third-party, business alone, which show a corresponding percentage ratio of 77.83 per cent. Owing to the short period .covered by the third-party figures, too much should not be inferred from this . comparison, beyond a broad indication, that may. be disproved by further experience, that •the premiums as thoy 'stand to-day are not too high." " ~.