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| Insurers, Unexpected Victims in Road Accidents |
| By: Debbie Too |
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Reducing the number of road accidents will be the first step in containing the escalating motor insurance claims in Brunei Darussalam. This will benefit the country as consequently, medical, long-term disability and welfare costs will be reduced, along with lost man-days resulting from accidents.
With authorities trying to curb road accidents, statistics show the rate of accidents to vehicle population in Brunei has steadily decreased from two per cent in 1994 to one per cent in 2006.
However, the number of fatalities per accident remains alarmingly high with up to 25 per cent of all accidents resulating in death of bodily injury. This mean that there is a one in four chance of an individual sustaining bodily injury or death if the individual were to get into a motor accident.
According to a paper from the National Insurance Cp. Bhd, apart from those injured or those who suffer automobile damage as well as bodily harm or death, another loser in the scenario is the Brunei insurance industry, whihc is plagued by escalating motor claims, resulting in huge losses, whihc has, in turn, led to the weakening of the industry and the eventual withdrawal from the market of a number of insurance companie. One such company was recently placed under the executive management of the Ministry of Finance after it failed to meed the solvency requireed for insurers.
Quoting an independent study commisioned by the General Insurance Association of Brunei Darussalam, National Insurance said motor insurance claims made from 1994 to 2004 in Brunei show that third-party claims have increased dramatically from $10million to nearly $30 million. Brunei is believed to have the highest motor third-party bodily injury claims record in Asean.
If current claims trend continues, it is possible that it will lead to the inability of lcoal insurance companies to meet their obligations in settling claims, increase insurance premiums, possible insolvency of insurance companied and the withdrawal of support of international reinsurance companies to the local insurance industry.
A breakdwon in the country's insurance system will inevitably pose a heavy burden on the government's welfare system and the community at large. |
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