29 MAY 2002

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Low premiums troubling insurance companies

Local insurance companies seem concerned over the amount of cars travelling along our roads. The increase in private motor vehicles has also caused an automatic increase in road accidents, producing a considerable amount of casualties.

During the January – March period in 2001, there were 176 accidents involving passenger cars. Of these 65 involved persons aged between 15 and 24 years of age, the age bracket with the highest incidence of accidents. During the same period in 2002, accidents went down to 70 with the 15 – 24 age bracket accounting for the highest number of collisions.

However on the down side, when one considers all forms of vehicles, reported accidents have reached 3,307 with an increase of 254 from 2001. From a total of 151 drivers that sustained injuries, 122 were slight, whilst 29 were grievous.

Collisions automatically involve insurance companies. At first glance, one might think that these enjoy an increase in business generated by new vehicles on the road. But accidents mean increased claims.

Asked about their views regarding the premiums being charged today, local insurance companies gave divergent views.

A spokesman from a leading insurance company said, "Premiums are not realistic, vis a vis the number of cars on the road, though they (the premiums) have actually gone up. The trouble with raising them further until they properly reflect the situation, is the risk of business being transferred to competitors."

Francis Valletta, General Manager Motor Underwriting, Gasan, commented thus, "Pricing has had to go up because experience of past claims in the last two years has not been good. The premiums today are realistic. Premiums are to become worse because courts are starting to award large sums of money on fatality cases. In the event that we join the EU the premiums would have to increase to cover the cost of people travelling abroad with their cars."

Both agreed that the most common cover is either Third Party or Third Party Fire and Theft for private passenger cars.

33 new cars are purchased on a daily basis in Malta and Gozo. This transpires from recent statistics, which give some explanation to the cause of so many congested roads. During the first quarter of 2002, 2,317 new licences were issued for private vehicles. This brings up the stock of licensed private motor vehicles to 190,140. In March 2001 the figure stood at 183,423 whilst in March 2000, the figure was of 177,714. This signifies that over a two-year period, our roads saw an increase of 12,426 new vehicles. All of which take up road space and contribute to the general chaos during traffic jams.

Private vehicles fall within a category which is sub-divided in six classes, ranging from class 1 (1300cc) up to class 6 (2000cc). Of these, private vehicles falling within class 3 (equivalent to 1450 – 1500cc) were the most popular, with at 582 new licences.

 



Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
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