The problem of taxi premium increases has lingered for many years, and the taxi industry has complained endlessly. The insurance industry has pointed out that the taxi insurance business has recorded losses in 11 of the past 16 years.
Taijia Insurance, a leading company with a market share of 60%, has recently notified the taxi industry that it will stop accepting new insurance policies, making it even more worrying that it will be difficult for the industry to purchase insurance in the future.
Behind the problem of taxi insurance, it reveals that the taxi industry in Hong Kong is falling into a vicious circle, with low income, high risk, and lack of new blood. It is pushing the industry to an aging population; even if there is a problem with the driver’s driving attitude, it is difficult to be effective even if new people are not in the industry. Mechanism management, the black sheep in the industry cannot be eliminated.
In this session of the Legislative Council, a subcommittee was set up to discuss the issue of taxi insurance, and concluded that the two major issues, rampant litigation and driver safety, have led to an increase in the cost of taxi insurance claims.
Zhou Guoqiang, chairman of the Taxi and Minibus Chamber of Commerce, said that in recent years, no one has been a taxi driver. "Ten cups get nine caps." Even if it is known that some drivers have a high accident rate, it is still difficult to kick them away.
The senior driver said that the driver's income was not ideal, and the car dealers only "hung on rent collection", which eventually led to the current predicament, describing the entire industry as a need to reshuffle.
Taxi premiums have increased, and the joint subcommittee of the Legislative Council attributed it to litigation and taxi drivers’ driving safety.
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Taxi insurance premiums are high. According to figures from the Legislative Council, the comprehensive insurance (fully covered) premium was about 34,000 yuan last year, and the average third-party insurance premium was 26,000 yuan, and the related premiums also increased by about 20% compared with the same period in the previous year.
The taxi industry complained endlessly, but Liu Pei-ling, the executive director of the Insurance Federation, pointed out in a radio interview this year that in the 16 years since the introduction of the taxi industry’s insurance products, 11 years have been a loss of money.
The Legislative Council's Panel on Transport and the Panel on Financial Affairs formed a joint subcommittee on insurance matters in the transportation industry this year to discuss the problem of high insurance premiums in the taxi industry.
In its research report, the subcommittee pointed out that the high premiums of taxis in Hong Kong are mainly due to the continuous loss of taxi insurance business, which is attributed to the improper driving behavior of some drivers, as well as insurance fraud and lawsuit cases.
Taxi comprehensive insurance business has recorded losses in 4 years in the past 5 years
According to the figures of the China Insurance Regulatory Commission, the underwriting profit of taxi comprehensive insurance business has been declining in the past five years, and even recorded a loss since 2017. Even though the situation improved last year, there was still a total loss of more than 40 million yuan.
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Checking the statistics of the Transport Department and the Police Force, there were more than 4000 traffic accidents involving taxis in the past five years. It fell back to last year, but it is still the second highest accident rate in Hong Kong. For every thousand taxis, there are Accidents occurred in 213 vehicles.
The report of the subcommittee recommends that car owners or car dealers hire drivers with good driving records to reduce insurance premiums.
Lack of new hires, car owners and less drivers
Zhou Weiqiang said that the average age of taxi drivers has risen from 58 years ago two years ago to 60 years old now. "That is to say, the situation of hiring drivers has not been improved in the past two years." "I don't know," but he said that there is a lack of newcomers to join the trade. "Ten cups get nine lids. Pick the driver? When the car is dried, (the owner) doesn't have more money than the bank."
Zhou said that taxi drivers have not increased their fares for 4 years, that is, the income of taxi drivers cannot increase. Passengers should not provide services at popular prices.
The problem of litigation for taxi accidents is also very serious. In July this year, the police also arrested a Palestinian man who was involved in a collision with a taxi while driving a motorcycle and was injured. He was then covered by the third party insurance for the taxi involved. The company claimed a total of 3 million yuan. After investigation, the insurance company found that the man’s statement was inconsistent with the facts, and it was suspected of fraud.
Regarding the litigation issue, Zhou Guoqiang said that a number of measures have been implemented with the insurance industry, such as the installation of a driving recorder, and the government is also preparing to amend the law to prevent legal aid recipients from appointing attorney representatives, hoping to help reduce litigation.
However, he said that after installing the driving recorder, it is still necessary to observe whether the amount of claims for next year has dropped. It is estimated that it will take about three years to reduce the premiums "with a buzz."
There is a shortage of taxi drivers, and car owners dare not pass on the cost of insurance premiums to car rentals.
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Veteran driver: the driver's income is not ideal and the car dealer only collects rent
The current taxi car insurance expenses are generally borne by the car owner.
Guan Wohua, chairman of the Urban Taxi Drivers' Joint Committee, said that when a small number of people enter the industry, the car owner will not attack the driver and reflect the relevant cost through the increase in car rental.
In the case of a car asking for a driver, some drivers even clearly stated to the car owner that "you will increase your rent and you will have to split the key", not to mention the introduction of taxi drivers to purchase third-party insurance on their own.
Guan believes that the increase in premiums only reflects the current problems in the entire taxi industry.
The driver's income is not satisfactory, the car dealers only "hang up rent collection" without improving the industry environment. The Transport Department has a "don't do it, don't go wrong" mentality, which makes the taxi industry bad.
He described the current taxi industry as "a pig and a dog, don't let the deposit be allowed to enter the industry", which has led to a high accident rate and litigation problems.
He said that the entire industry needs to be shuffled, drivers must be educated, how to do a good job in the service industry, etc.
Legislative Council Subcommittee Report Advocates the Adoption of Fleet Management
The report of the Legislative Council’s Joint Subcommittee on Transportation Insurance has made recommendations to solve the problem of high premiums. It believes that the Transportation and Housing Bureau can formulate policies and measures to encourage the taxi industry to adopt fleet management and expedite the approval of taxi fare increase applications. Taxi drivers have a reasonable income to attract new blood.
The report also expects the police, the Legal Aid Department, and the Social Welfare Department to crack down on insurance fraud and cover lawsuits, hoping to reduce insurance premiums.
The industrial building opposite the China Insurance Regulatory Bureau is now reprimanding the government and businessmen for colluding with Taiga Insurance. Downstairs, Taiga Insurance, the leading taxi insurance company, refused to accept new orders. Total business gross premiums rose 8% year-on-year to 59.9 billion yuan
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