MTPL as a challenge to actuaries The Czech
- Slides: 10
MTPL as a challenge to actuaries The Czech and the Austrian motor insurance market different countries but similar problems
Development of motor insurance market § § § Austria 1. 8. 1977 introduction of the bonus/malus system (private cars, taxi and hired cars) 1. 9. 1994 MTPL-insurance law 1994 (deregulation) 1. 7. 1997 minimum sum insured 1. 09 million EUR (15 million ATS) 1. 1. 2002 EURO 2004 (? ) minimum sum insured 3 million EUR CZECH Rep. § 1. 1. 2000 demonopolization minimum sums insured PD 150 000 EUR BI 550 000 EUR § 1. 1. 2000 -31. 12. 2002 partial regulation of premium § 1. 1. 2003 full deregulation bonus-malus system § 1. 5. 2004 EU&adoption 4 th directive PD 550 000 EUR BI 1 060 000 EUR
Rating factors used in MTPL § § Austria Power of engine (k. W) Bonus-/malus-class Sum insured (1. 09 mio EUR to 10 (15) mio EUR) Additional rating factors § Age of policy holder § User of the car § Additional bonus classes or discounts § Sex (? ) § (Region) § (Type of car) § (Age of car) § (Firms) §. . . CZECH Rep. OLD (bound solely to vehicle): § Vehicle type § Engine cubage or vehicle weight NEW: § bound to policy holder: § § § Bonus/malus class Age Region Person/company bound to vehicle: § Age of car § others: § Sum insured
Bonus/malus-system § 18 § § § Austria classes Starting class 09 Claim-free year 1 step towards bonus Claim 3 steps toward malus 00 50% 01 50% 02 60% 03 60% 04 70% 05 70% 06 80% 07 80% 08 100% 09 100% 10 11 12 13 14 15 16 17 120% 140% 170% 200% Czech Rep. (prevalent BM) § 16 classes (starting = 10) § function f „claims-free duration“ = time spent in the system § if claim f=f-36 months 00 01 02. . . 09 10 11 12. . . 14 15 120 M 50% <108, 118>M 55% <96, 107>M 60% <12, 23>M <0, 11>M <-12, -1>M <-24, -13>M 95% 100% 125% 150% <-48, -37>M <-60, -49>M 200% 250%
The Austrian bonus/malus-system
The Czech bonus/malus-system not unified heterogenity in: § range of scale § maximum bonus = 50% (unified) § maximum malus in range <0; 150%> § number of B/M states <11; 17> § size of one step § bonus steps 5% or 10% § malus steps are generally increasing and differ from company to company (below are examples of malus scales): § 25%, 50%, 75%, 100%, 150% § 5%, 10%, 15%, 20%, 25%, 30%, 50%, 100% § 10%, 20%, 30%, 60%, 120% § malus NA
The implications of the deregulation in Austria Source: VVB – Versicherungsverband (Association of Austrian Insurance Companies)
Development of average MTPL premium in Czech Republic Full deregulation Demonopolization Source: Czech Insurers Bureau Estimate
The implications of the deregulation in Austria hail event Source: VVB – Versicherungsverband (Association of Austrian Insurance Companies)
Expectations for the Czech market § § § § Higher competition Trend towards bonus Lower average premiums Decrease in claims frequency Higher sums insured Higher average claims Increase in claims ratio
