Taijia Insurance, the leader in the taxi insurance industry, refused to accept new taxi insurance policies.
The IA responded to newspaper enquiries on Tuesday (4th) to indicate that it was aware of the incident. In order to ensure the stable operation of the market and avoid impact on the taxi industry and the public, it has contacted the Hong Kong Federation of Insurance Companies and other insurance companies to formulate plans earlier. Some insurance companies have agreed to provide a 30-day insurance plan to affected car owners to ensure that taxis will not suddenly fail to comply with the law due to the cancellation of the insurance policy.
Since cars must be equipped with valid third-party injury and death liability insurance in compliance with the regulations to be able to drive on the road, and after the financial tsunami in the early years, the auto insurance industry launched a "cut-throat" price reduction war. With the premium price advantage, it attracted a large number of car owners to insure during this period, and it has become the leader of the taxi insurance industry from the beginning.
Although there are more than 50 licensed insurance companies in Hong Kong that underwrite auto insurance, because taxi insurance suffers from serious losses, only less than ten insurance companies are willing to accept taxi insurance.
According to estimates by the taxi industry, Taiga Insurance currently undertakes car insurance for more than 10,000 taxis, with a market share of 60%. When the leading company refuses to underwrite the industry, a large number of taxis have the opportunity to be forced to stop. .
Even if there are four insurance companies offering temporary underwriting plans, including Bank of China Group Insurance, China Pacific Insurance, China Taiping Insurance, and China Merchants Wing Lung Insurance, it is still unknown whether the market can absorb the large amount of demand in a short time.
During the epidemic, taxi queues can be seen from time to time at taxi stands in Central.
(Photo by Liang Pengwei)
It is necessary to prescribe the medicine for the reason of Chint Plus abandoning the insurance
Taijia Insurance stated that the suspension of undertaking the transfer of new taxi policies from other insurance companies is to avoid being suspended for a long time in foreign currency investment, which may lead to potential financial losses.
However, in fact, at the end of November last year, "Taiga Insurance" received the approval of the China Insurance Regulatory Commission to resume its foreign currency investment. There are still further surrender actions. The reasons behind it are worth pondering by the society.
Even though taxi premiums have continued to rise in recent years, Taiga Insurance still chooses to surrender the insurance.
In the 16 years from 2005 to 2020, insurance companies have recorded losses in their taxi business for 11 years. Of course there are commercial and economic factors, but is this the only reason?
The Legislative Council has explored the issue of taxi insurance and concluded that two major issues, rampant litigation and driver safety, may be regarded as factors that have contributed to the increase in the cost of claims for taxi insurance.
For example, between 2017 and 2019, the amount of vehicle insurance fraud cases ranged from 10,000 to 20,000, but in 2020 it rose sharply to 1.43 million.
In addition, with more than 18,000 taxis currently driving, the number of traffic accidents involved has also increased slightly year-on-year, from 3,837 to 4,198 between 2017 and 2019.
The government must support the industry ecology
Taijia Insurance's surrender is a business decision, and it is difficult for others to speak up.
The bureau is now coordinating the taxi industry with other insurance companies to help slow down the incident. However, if the industry's fundamental needs are not taken seriously, it is inevitable that there will be another surrender crisis.
In the long run, the government should also shoulder the responsibility of supporting the industry’s ecology. For example, it can consider forcing drivers to install driving recorders and step up efforts to crack down on litigation to protect the interests of the insurance industry and create a business environment that is both satisfactory to both industries. Both can develop healthily.
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