TOO EARLY YET FOR A PRONOUNCEMENT

Rotorua Morning Post, Volume 1, Issue 12, 5 September 1931, Page 4

TOO EARLY YET FOR A PRONOUNCEMENT

("Post" Special Gommissioner.')

third party' risk WORKINGS OF SCHEME ARE EXPLAINED.

WELLINGTON, Thursday. The opinion that it is yet too early to make any definite pronouncement in regard to the third-party insurance risk schem© is expressed in the annual report of the Transpoi-t Department, which has been presented to Parliament. "Although this Act is mueh more complete in its provision for insui'ance of third partiesdnjured or killed by negligent motorists than any other similar enactment of which the. Department is aware, the case of . a third party who is injured or killed by'a motorist of the 'hit and run' type is not covered by the Act unless the motorist is subsequently located," states the report. "The insurance companies are not desirous of taking advantage of this fact, and an agreement, to be signed by all of the companies accepting risks and by the Minister of Transport, has been finalised and will be gazetted, laying down the procedure to be followed to obtain compensation in such cases, proof of negligence by the motorist being, of course, an essential ingredfent in all these accidents. "For the year ended 31st May, 1930, forty-two insurance concerns gave the prescribed notice to undertake business under the Act and carried on business accordingly. The premiums for the year, excluding, of course, any relating to the 1930-31 licensing year, amounted to £240,630 17s 9d, after taking into account adjustments between the insurance concerns and the insured on account of extra premiums and refunds due to changes in the classification of the vehicles and the cancellation of registrations. The commission of the Post and Telegraph Department, at the rate of 6d per transaction, amounted to £5624 7s 4d, leaving a balance of .£235,006 10s 5d. .. "Claims settled during the year. including costs, amounted to £84,959 18s 6d, while the liability in respect of outstanding claims at the 31st May, 1930, (including -costs), was estimated by the concerns carrying oii the third-party business at £97,950 8s 6d. Assuming that this estimated - liability wil eventuate, this means that the total payments on account of compensation (including costs) will amount to £182,910 7s, or 77.83 per cent. of the net total of premiums received.

Too Early for Conclusions. "Attention is specially directed to the fact that the statistics cover the period of one year only, and must be interpreted with the utmost caution. It is quite impossible to state to what exent they represent normal or abnormal conditions. Experience over a longer period is the only way of aseertaining figures that will be typical of the third-party business in all its ramifications. The developmerits of the scheme are being elosely studied with a view to ensuring that due equilibrium is maintained between premiums and benefits, but definite conclusions cannot be reached until more experience has been recorded. "It of interest to note that the percentage ratio of claims actually paid (including costs) to premiums for all classes of insurance undertaken in accordance with the provisions of the Accident Insurance Companies Act, 1908 — accident (including motor accidents), disease, employers' liability, etc. — was 51.75, 4-9.32, 54.03, 57.98 and 60.62 per cent. respectively for the five calendar years ending with 19-28. | As the outstanding claims for any particular year would be paid during the succeeding or subsequent years, these figures are comparable, up to a point, with those for the third-party business alone, which show a corresponding percentage ratio of 77.83 per cent. Owing to the short period covered by the thirdparty figures, too much should not bo inferred from this comparison, beyond a broad indication, 'that may be disproved by further experience, that the premiums as they stand to-day are not too high."