Motor accident claims drop to 7-year low
MOTORISTS in Singapore may have become safer on the road, going by the number of accident reports filed with insurers last year.
According to figures released by the General Insurance Association (GIA) yesterday, the number of motor accident claims filed last year fell to a seven-year low of 148,792.
The figure was 3.2 per cent lower than the previous year's, and the second consecutive annual drop since 2012.
The association attributed the results to better driving practices, more stringent enforcement measures by Traffic Police and a slight drop in the overall vehicle population.
Partly because of this, insurers posted higher profits. Despite gross premiums sliding by 2 per cent to $1.19 billion last year, underwriting profit more than doubled to $149.5 million - continuing a four-year profitable trend.
The association said the bigger profit last year was also on the back of adjustment to loss-reserving. This means a number of insurers had been too conservative in setting aside funds for potential claims in previous years, and had recognised those as profit last year.
The better profits came despite lower premiums. Average premiums for private vehicles fell by 3.8 per cent to $1,103. This was the third consecutive drop since 2011, and insurers reckon the trend could continue.
GIA president A. K. Cher said keener competition also contributed to lower premiums.
"In the last six months or so, we had two to three new players in the market," Mr Cher said, adding that these were not new insurance companies, but companies which had previously not covered motorists and were attracted to the improved profitability of the business segment.
Indeed, the motor segment had long been loss-incurring, turning around only in 2011.
Another contributor to profits is shrinking claims. The GIA said incurred claims fell by 17 per cent to $591.2 million last year, the lowest in at least five years.
Pui Phusangmook, senior vice-president of NTUC Income, the largest motor insurer here, said this could partly be because of Singapore's ageing car population.
He said car owners are less likely to make small claims for cosmetic repairs for older vehicles if doing so could affect their no-claims bonus.
General repair costs for older vehicles are also generally lower because consumers are more willing to accept re-conditioned parts instead of brand new spares.
Singapore's vehicle population has been getting older in the last decade as drivers have held on to their cars, with stratospheric certificate of entitlement prices dissuading them from buying new ones.
The Traffic Police were circumspect about GIA's accident figures. Although they noted that road fatalities have dropped, the number of injury-accidents has crept up.
"All road users share the responsibility of keeping our road safe," a spokesman said. "The Traffic Police will continue to work with relevant stakeholders to encourage a culture of safe and courteous road use for all."