Page 365 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

as different rates are provided for Own Damage,
and Act only covers. This aspect is also to be
incorporated in the statistical structure.

2) Correctness of Statistics - Like any statistics the
value and use of motor insurance statistics depends
upon the correctness of the figures and the speed
with which they can be produced.

3) Interpretation of statistics - Interpretation of
statistics is as important as collation. The claims
cost reflects not only the paid claims but
outstanding claims.

Therefore, it is essential that an effective system
is adopted for proper estimates of outstanding
claims be devised. The result of past loss
experience have to be interpreted in the light of
changing conditions surrounding motor insurance
business.

4) Action on statistics - Once the claims cost is known,
it is possible to develop incurred claims to premium
ratio over a reasonably long period in each
classification to consider effecting appropriate
underwriting measures by the Companies and
rate revisions by the Tariffs Advisory Committee.

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