Rise in serious accidents in Singapore takes toll on insurers' bottom line

Motor claims rose by 8.3 per cent in 2021, said the General Insurance Association. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Motor insurers' underwriting profit more than halved last year to $49.7 million on the back of higher claims incurred for road accidents.

In its annual review, the General Insurance Association (GIA) said on Thursday (March 24) that motor claims rose by 8.3 per cent or $42.1 million, driven by a rise in the number of fatal and serious accidents as more economic activities resumed.

It noted that the number of fatal road accidents had risen by 25 per cent, from 80 cases in 2020 to 100 cases in 2021. Injury-related road accidents also increased.

"While the number of fatal accidents was still lower than the pre-pandemic total in 2019, GIA urges motorists to continue to stay vigilant and practise good road safety habits," the association said.

The GIA expects motor claims to increase in the coming year "as Singapore navigates towards an endemic new normal".

The motor insurance segment - accounting for the largest share of general insurance at 26 per cent - recorded flat growth in 2021, with $1.15 billion in gross written premiums for the financial year - a 2.7 per cent increase from 2020.

With the exception of travel insurance, all other insurance sectors performed worse than in 2020.

Health incurred an underwriting loss of $5.1 million, from a profit of $17.9 million previously; property dipped to $41.9 million, from $43.7 million; employers' liability plunged to $29.9 million, from $41 million; personal accident fell to $24.5 million, from $28.1 million; and travel rose to $8.3 million, from $5.2 million.

The GIA said insurers are also stepping up efforts to curb insurance fraud cases, which it said had trebled from 2018 to 2020, citing what was revealed in Parliament in January.

The increase was largely from a jump in fraudulent health insurance claims, which rose to 32 reports in 2020 from five in 2018, Law and Home Affairs Minister K. Shanmugam had said then.

The GIA added: "Fraudulent activities have also increased further into 2021 and the trend may potentially continue and increase in 2022," the association said. "With business and social activities resuming to pre-pandemic levels, the sector is also focused on monitoring fraudulent activity in the motor insurance segment and actively continuing to strengthen its processes to combat fraud in the segment."

An association spokesman said accidents involving taxis and private-hire vehicles are almost invariably accompanied by whiplash claims. He said the GIA will continue to investigate this trend, which is driving up injury claims.

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