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Main taxi insurance coverage supplier scrapped all insurance policies

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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 could scrap all insurance policies after seven days. In different phrases, roughly 75% of the present taxi insurance coverage insurance policies might 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 might be prohibited from driving. Many drivers are puzzled and frightened about shedding their livelihood with their insurance coverage being all of the sudden scrapped. Related sources estimated that greater than 550,000 passengers and 25,000 taxi drivers could also be affected on daily basis. These drivers will lose a complete of $44 million in enterprise every day.

In as we speak’s Kwiksure function, our specialists will analyze the ins and outs of this incident, examine the dilemma confronted by the taxi insurance coverage enterprise and possible options.

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(Up to date 7/1)

This morning, the Insurance coverage Authority (IA) introduced that it’s going to take over the enterprise and belongings 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 could 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 conventional operations of Goal Insurance coverage.

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

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

– The scenario is a particular case as 4 insurers must course of 8,000 insurance policies in a brief time frame. If the insurers fail to finish the coverage issuance course of earlier than the coverage cancellation deadline, they will make a 30-day mortgage association, or postpone the submission of some paperwork, in order that they will present insurance coverage protection with out totally 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 homeowners don’t must inquire concerning the premium by themselves, in order to facilitate the switch to insurers that also have capability.

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

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4 insurance coverage corporations might be able to present transitional insurance coverage options

In accordance with 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 not too long ago 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 lined by legitimate motor insurance coverage when driving on the highway, it’s estimated that greater than 10,000 taxis in Hong Kong could not be capable of fulfil this requirement and might 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 corporations (BOCG Insurance coverage, China Pacific, China Taiping, and CMB Wing Lung Insurance coverage), and provided a 30-day short-term coverage transition plan. The pricing might be primarily based on the no-claim low cost and the present yr’s fee file. Drivers who’re issued a short lived coverage can nonetheless legally drive and function through the interval, however they’ve to search out an insurer to write down a brand new coverage inside the 30-day interval. Nonetheless, it’s anticipated that some drivers will surrender the switch on account 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 options, similar to help find new insurers. As well as, the astonishing enhance in taxi insurance coverage premiums lately has been a terrific burden for taxi drivers.

In actual fact, this incident shouldn’t be groundless. As early as final November, the main insurer has suspended the renewal and issuance of recent taxi insurance coverage insurance policies for present taxis. In accordance with the corporate’s 2020 annual report, the loss ratio within the taxi section was 77.6%, the best amongst all companies, leading to a lack of HK$11.78 million through 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 revenue from this section reached HK$160 million, accounting for roughly 43.2% of the general gross premium revenue.

Hong Kong taxi insurance coverage suffers from deteriorating losses









12 months

2015

2016

2017

2018

Gross Premium (HKD in hundreds of thousands)

408

410

414

421

Gross Premiums Enhance

(in comparison with the earlier yr)

2.77%

0.49%

0.98%

1.69%

Underwriting Revenue

(loss, HKD in hundreds of thousands)

25

21

(42)

(70)

Underwriting Revenue/Loss Share

6.127%

5.122%

-10.145%

-16.627%

Enhance in Declare Quantity

-0.78%

1.57%

17.22%

7.68%

Supply: Legislative Council Paperwork

Legislative Council assembly reveals shocking enhance in premiums

In accordance with the 2020 Legislative Council Joint Subcommittee Assembly on Transport Insurance coverage, on the time, “there have been only some insurance coverage corporations underwriting taxi insurance coverage, the market lacked competitors and the scenario was not ultimate…” There are nonetheless eight insurers available in the market 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 corporations involved to extend their premiums by a bigger margin to make up for the losses suffered.”

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

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








12 months

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 12 months

-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 12 months

-1.0%

-0.3%

1.4%

+7.5%

+17.9%

Supply: Legislative Council Paperwork

Taxi insurance coverage trade extra losses than earnings

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. Consequently, it’s troublesome for the trade to eradicate sure outdated drivers even when they’ve issues with their driving attitudes. The dearth of an efficient administration system additionally results in a excessive accident fee.

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

Driver issues of safety

Relating to the driving security of taxi drivers, the crew 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 scale back visitors accidents, and adopting fleet administration to strengthen car 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 attorneys to inflate the declare quantity. This case 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 with a purpose to guarantee earnings.

Lastly, the crew additionally beneficial that the authorities contemplate suspending motor insurance coverage levies or enhancing cross-border insurance coverage for the transport trade, in order to scale 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 automotive insurance coverage trade. Along with automotive insurance coverage (third get together and complete), we additionally present dwelling insurance coverage, motorbike 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 software now to get a free automotive insurance coverage quote! Alternatively, contact our crew of insurance coverage advisors for a free plan comparability and neutral recommendation as we speak. 



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