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HomeAutomobile InsuranceMain taxi insurance coverage supplier scrapped all insurance policies

Main taxi insurance coverage supplier scrapped all insurance policies


的士保險龍頭退保 一文分析原因及保險選擇

Main taxi insurance coverage supplier scrapped all insurance policies  – Evaluation and insurance coverage choices (Up to date 7/1)

The main taxi insurance coverage supplier in Hong Kong introduced with out previous warning that it might scrap all insurance policies after seven days. In different phrases, roughly 75% of the present taxi insurance coverage insurance policies can be terminated. If drivers affected by this transformation fail to discover a appropriate insurance coverage firm to take over their insurance policies inside this time, they could be prohibited from driving. Many drivers are puzzled and anxious about shedding their livelihood with their insurance coverage being abruptly scrapped. Related sources estimated that greater than 550,000 passengers and 25,000 taxi drivers could also be affected day-after-day. These drivers will lose a complete of $44 million in enterprise every day.

In at present’s Kwiksure characteristic, our consultants will analyze the ins and outs of this incident, research the dilemma confronted by the taxi insurance coverage enterprise and possible options.

—————————————————-

(Up to date 7/1)

This morning, the Insurance coverage Authority (IA) introduced that it’s going to take over the enterprise and property of Goal Insurance coverage, and can maintain a press convention within the afternoon to elaborate.

– By way of regulatory work and market intelligence, the IA discovered that Goal Insurance coverage’s funding actions and fund allocation might have violated the necessities of the Insurance coverage Ordinance. With the corporate’s inner governance additionally missing, the Authority exercised its rights on the grounds of public curiosity to nominate Deloitte’s Touche Tohmatsu because the supervisor to take care of the traditional operations of Goal Insurance coverage.

– Deloitte will evaluate and assess the present asset standing of Goal Insurance coverage to acquire a full image of the corporate’s future route.

– The solvency of Goal Insurance coverage has been poor. The IA has beforehand imposed extra regulatory necessities on the corporate, together with extra statutory deposits and restrictions on the use and deployment of its property.

– The scenario is a particular case as 4 insurers must course of 8,000 insurance policies in a brief time period. If the insurers fail to finish the coverage issuance course of earlier than the coverage cancellation deadline, they’ll make a 30-day mortgage association, or postpone the submission of some paperwork, in order that they’ll present insurance coverage protection with out absolutely issuing new insurance policies. That is to keep away from hindrance to the taxi trade.

– Since Tuesday, the IA has taken the lead in coordinating, in order that taxi house owners don’t must inquire in regards to the premium by themselves, in order to facilitate the switch to insurers that also have capability.

– As of this morning, insurance policies for about 7,894 taxis have been diverted to the 4 insurance coverage firms.

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4 insurance coverage firms could possibly present transitional insurance coverage options

Based on sources, the main taxi insurer accounts for greater than 60% of the insurance policies for about 18,000 taxis in Hong Kong. Nonetheless, it has lately issued notices to 75% of taxi drivers that it’s going to terminate their insurance coverage insurance policies after a seven-day discover interval. As the present legal guidelines in Hong Kong require autos to be coated by legitimate motor insurance coverage when driving on the highway, it’s estimated that greater than 10,000 taxis in Hong Kong might not have the ability to fulfil this requirement and can be prohibited to drive.

The IA and the Federation of Insurers have notified the trade that they’ve coordinated the switch and underwriting of associated insurance policies from 4 insurance coverage firms (BOCG Insurance coverage, China Pacific, China Taiping, and CMB Wing Lung Insurance coverage), and supplied a 30-day momentary coverage transition plan. The pricing can be primarily based on the no-claim low cost and the present 12 months’s cost document. Drivers who’re issued a brief coverage can nonetheless legally drive and function throughout the interval, however they’ve to seek out an insurer to jot down a brand new coverage inside the 30-day interval. Nonetheless, it’s anticipated that some drivers will surrender the switch because of excessive insurance coverage premiums.

Taxi teams are dissatisfied with this, and criticized the insurance coverage supplier that because the market chief they didn’t present any alternate options, resembling help to find new insurers. As well as, the astonishing enhance in taxi insurance coverage premiums lately has been an incredible burden for taxi drivers.

In actual fact, this incident just isn’t groundless. As early as final November, the main insurer has suspended the renewal and issuance of recent taxi insurance coverage insurance policies for current taxis. Based on the corporate’s 2020 annual report, the loss ratio within the taxi section was 77.6%, the very best amongst all companies, leading to a lack of HK$11.78 million throughout the interval. Nonetheless, within the 2021 interim report, the segmental revenue of the taxi insurance coverage enterprise recorded HK$34.204 million, and the gross premium earnings from this section reached HK$160 million, accounting for about 43.2% of the general gross premium earnings.

Hong Kong taxi insurance coverage suffers from deteriorating losses









Yr

2015

2016

2017

2018

Gross Premium (HKD in thousands and thousands)

408

410

414

421

Gross Premiums Improve

(in comparison with the earlier 12 months)

2.77%

0.49%

0.98%

1.69%

Underwriting Revenue

(loss, HKD in thousands and thousands)

25

21

(42)

(70)

Underwriting Revenue/Loss Share

6.127%

5.122%

-10.145%

-16.627%

Improve in Declare Quantity

-0.78%

1.57%

17.22%

7.68%

Supply: Legislative Council Paperwork

Legislative Council assembly reveals stunning enhance in premiums

Based on the 2020 Legislative Council Joint Subcommittee Assembly on Transport Insurance coverage, on the time, “there have been only some insurance coverage firms underwriting taxi insurance coverage, the market lacked competitors and the scenario was not splendid…” There are nonetheless eight insurers out there that underwrite taxi insurance coverage, however in 11 of the 16 years from 2005 to 2020, there have been underwriting losses. The Federation of Insurers defined that “taxi insurance coverage enterprise has lengthy recorded underwriting losses, and the losses on this section expanded extra quickly in 2019, prompting the insurance coverage firms involved to extend their premiums by a bigger margin to make up for the losses suffered.”

Based on IA paperwork, the common premium of taxi third-party insurance coverage rose from HK$20,435 in 2016 to HK$26,189 in 2020, a rise of 28%.

Adjustments in taxi insurance coverage premiums in Hong Kong from 2016 to 2020








Yr

2016

2017

2018

2019

2020

Complete Protection

25,911

25,859

25,537

28,050

33,902

In comparison with the Identical Interval

of Earlier Yr

-2.5%

-0.2%

-1.2%

+9.8%

+20.9%

Third Social gathering Insurance coverage

20,435

20,381

20,670

22,210

26,189

In comparison with the Identical Interval

of Earlier Yr

-1.0%

-0.3%

1.4%

+7.5%

+17.9%

Supply: Legislative Council Paperwork

Taxi insurance coverage trade extra losses than income

In actual fact, the issue plaguing the trade didn’t occur in a single day. Taxi fares haven’t elevated in 4 years. As well as, there are not often younger drivers within the trade, inflicting a niche in expertise. Because of this, it’s tough for the trade to remove sure outdated drivers even when they’ve issues with their driving attitudes. The shortage of an efficient administration system additionally results in a excessive accident charge.

The Legislative Council arrange a sub-committee to debate the problem in 2021, and concluded that “driver security” and “rampant champerty” have led to a rise in claims.

Driver issues of safety

Concerning the driving security of taxi drivers, the group made the next suggestions together with implementing a taxi driver accountability system, encouraging the trade to rent drivers with good driving data, encouraging the trade to use know-how to cut back site visitors accidents, and adopting fleet administration to strengthen automobile and driver administration, attracting new drivers to the taxi trade, and many others.

Rampant champerty points

Champerty means abuse of insurance coverage, exaggerating, and even falsely reporting accidents, after which making a declare towards the insurance coverage firm, and even conspiring with legal professionals to inflate the declare quantity. This example has worsened as present taxi claims usually are not required to supply footage. Confronted with rising claims, insurers can solely enhance the general premiums of the trade to be able to guarantee income.

Lastly, the group additionally advisable that the authorities think about suspending motor insurance coverage levies or bettering cross-border insurance coverage for the transport trade, in order to cut back the monetary burden of the trade in buying insurance coverage.

Contact Kwiksure in your insurance coverage options

Kwiksure has over 20 years of expertise within the automobile insurance coverage trade. Along with automobile insurance coverage (third social gathering and complete), we additionally present residence insurance coverage, bike insurance coverage, Voluntary Well being Insurance coverage Scheme (VHIS), Hong Kong-Zhuhai-Macao Bridge (HZMB) insurance coverage, and many extra

Use our on-line citation device now to get a free automobile insurance coverage quote! Alternatively, contact our group of insurance coverage advisors for a free plan comparability and neutral recommendation at present. 



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