Page 17 - Insurance Times November 2021

experience, while quantifying the impact of a particular TABLE I - Some Incidence indicators of
factor, other factors are assumed to have remained Accidents
operationally constant. Let us begin our analyses by
unravelling the mystery of Incidence. 2001 2018 Percentage
Change
1. Incidence of Accidents : Accidents per 10,000
Incidence of accidents is a term which defines the vehicles 74 15 -80%
chance / probability / frequency of risk, devoid / stripped Accidents per 10,000
of its monetary attribute. As stated earlier the vehicles, kms of road network 1202 762 -37%
operating conditions, standard of enforcement of law Accidents per 1,00,000
and regulations etc do determine the rate of incidence population 39 34 -13%
of accidents. Following are some (not exhaustive)
incidence indicators relevant to the topic under (The above information is an extract of "Annexure - A"
consideration. attached, which provides the changes that have occurred
1. Number of accidents, in incidence of vehicle accidents during last five decades)
2. Accidents per 10,000 vehicles, All the above three incidence indicators, convey the
3. Accidents per 10,000 kilometers of road network, message unequivocally, that the accident frequency over the
and years has steeply fallen. The frequency severity indicated per
10,000 vehicles has seen a huge fall of 80%. As the rating
4. Accidents per 1,00,000 population.
mechanism uses the individual vehicle as a base for fixing
premium, this incidence per 10000 vehicles is more relevant
The frequency of the incidence can also be measured by further
for this study (road network and population do not play any
bifurcating the accidents into fatal and nonfatal, grievous and
minor injury casses. The Ministry of Road Transport and role in current rating mechanism). The message loudly and
Highways, Government of India, compiles the relevant data clearly conveyed by this indicator is also adequately and un-
regularly and publishes these indicators. The information for disputedly supported by many other incidence indicators
last five decades is found on the Ministry's website. We need including the ones listed above.
to carefully examine these indicators for the facts they reveal Incidence rate and Premium rate :
and the message they convey. Some indicators from the data
published by the said ministry for the accident years 2001 and Divergence
2018 are furnished below. Why years 2001 and 2018? Since When accidents per 10000 vehicles have come down by 80%,
years 2001 and 2018 (sometimes averages of few corresponding the premium rates too should have shown corresponding
previous years) constitute the base year for rates of 2002-03 decline. A look at the premium rates, prevailing in the two
and 2019-20 respectively (years for which premiums are years (appropriate to above refered accident years) under
compared in this analyseis), the accident data of these years consideration, in the table below tells an altogether different
becomes relevant and important. story.

Indian Motor Third Party Premium Rates, applicable during 2002-03 and 2019-20 (in rupees)
Vehicle category wise, along with Weighted Premium and Average Premium

Category of Vehicle Sub Category Rates Rates No of Weigh- Weigh- Weightagd Weightagd
for for times tage tage Premium Premium
2002-03 2019-20 Increase 2002-03 2019-20 2002-03 2019-20
% %
Private Cars Not exceeding 1000 cc 500 2072 4 13 13 65 276
Exceeding 1000 cc but not
exceeding 1500 cc 600 3221 5 13 13 77 428
Exceeding 1500 cc 700 7890 11 13 13 90 1049
Two Wheelers Not Exceeding 75 cc 135 482 4 71 74 95 356
Exceeding 75 cc but not
exceeding 150 cc 160 752 5 71 74 113 555
Exceeding 150 cc but not
exceeding 350 cc 175 1193 7 71 74 124 881
Exceeding 350 cc 190 2323 12 71 74 134 1716

The Insurance Times, November 2021 17