Motor issues

car1 Motor is one of the key priority (focus) areas for SAIA, as identified by the SAIA Board. The SAIA Board Committee: Motor deals with various important issues and includes SAIA Board members, as well as high-level co-opted members from the industry.

It is widely acknowledged in insurance circles that the short-term insurance industry’s focus in the last decade has been on the reduction of crime, more specifically the high rate of vehicle theft and hijackings. While recognising that this is still a matter of concern, the vehicle theft and hijacking rate has dropped significantly in the past five years. For this, due credit must be given to Business Against Crime South Africa (BACSA) and the South African Police Services (SAPS) who, in collaboration with other relevant stakeholders, played a significant role.

The current focus is the ever-increasing frequency of vehicle accidents and the cost of repairs.

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This could be partly attributed to the vehicle population in South Africa, estimated at over 9.5 million as well as the inability of the road infrastructure to cope with the increase in traffic density. This has, therefore, impacted on the cost of comprehensive motor insurance, with the steep increase in the cost of claims contributing to a decline in profitability.

While sophisticated underwriting tools have been implemented by insurers in an attempt to effectively manage costs, some external factors, such as the roadworthiness of vehicles and speed limits, have compounded this predicament.

To address this important issue, a work group was formed as a sub-committee of the SAIA Motor Advisory Committee. This workgroup identified key challenges facing the industry and proposed various interventions.

These key challenges were recognised at SAIA Board level and Motor was adopted as SAIA’s fourth key strategic area of focus. A Board Committee was then formed with the sole focus of addressing the broad motor-related issues, more specifically those of affordability and sustainability of motor insurance. Being the main class of business within the short-term insurance sector, focus on this area is now a sector imperative.

>> Click here to read more about road safety
>> Click here to read more about compulsory Third Party Motor Property Insurance

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The South African Insurance Association
Association Incorporated under Section 21
Registration No.1998/25543/08

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PO Box 30619
Braamfontein
2017

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27 Owl Street
Milpark

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Email: info@saia.co.za

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