MOTOR INSURANCE

Evening Star, Issue 21640, 8 February 1934, Page 2

MOTOR INSURANCE

THE THIRD PARTY RISK PREMIUMS AND CLAIMS CONTRASTED ' [Special to the ' Star.’] WELLINGTON, February 8. When the universal and compulsory third-party insurance system was imposed on the motorists of the dominion there was little information to guide the Government regarding the premium which would be adequate to cover the risk. However, it was estimated that for private motor cars £1 per annum would bo sufficient, and this lias proved by experience to be not only adequate to cover liabilities, but'is also giving the cover at something approaching the actual cost. The fee lias remained stable, though it has been subject to annual review. The only variation has been in respect to the higher fees payable on taxis and motor omnibuses, which after careful analysis by the Transport Department, and in consultation with the insurance companies, were slightly reduced last year, the estimated reduction in the aggregate premiums payable on these classes of vehicles for the current year being £IO,OOO. Results of the compulsory scheme show that iu 1930, the first complete year of operation, the claims paid equalled 86.09 per cent, of the premium income. In the following year the claim proportion dropped to 79.28 per cent., while in 1932 it had increased again to 86.75 per cent. Claims and premiums can be contrasted thus:— Year. Premiums. Claims. 1930 £235,007 £202,327 1931 212,864 192.541 1932 233,731 202,753 The Post and Telegraph Department charges Od per premium for collection, and this involves commission totalling nearly £5,000. The Department of Transport, in presenting these figures, comments that comparisons between claims’ ratios of the third-party risks insurance scheme with other branches of accident insurance show much higher ratios for the former, but this is accounted for by the fact that premiums are collected officially and handed over to the insurance companies, and also the fact that much wastful competitive struggle for business has been eliminated, thus reducing overhead charges. Last year’s results are now being collected for an official review of the premiums, so that the rates can ho fixed for payment when renewal of the insurance and motor registration must be made on May 31 next.