Few important observations in insurance loss ratio across different vehicles:
1. Claims ratio is driven by many factors including usage pattern, popularity, demand in terms of specific geographical areas, spares cost, child parts availability, spares availability in after market, type of end users, safety measures & equipment used in car.
2. Diesel cars of same size/segment as compared with petrol cars tend to ply more on roads and hence draw a higher claims ratio (by approx. 5-7%).
3. There are cars where the similar platform is used to make hatch back and notch back (sub 4 meter car) which keeps many body spares common in both hatch a well as the notch back models. It’s generally seen in such cars that hatch will have a higher claims ratio (approx. 5-8%) considering the fact that the buyer belongs to similar category and repair cost almost remains same in both hatch and notch back. However, hatch back models is charged lower insurance premium due to lower ex showroom cost which results into higher claims ratio.
4. Cars will higher parked population seems to draw slightly lower claims ratio as there are repair facilities available in open markets as well for more popular cars and spares tend to cost lesser as compared with lesser popular cars. Also, the indigenous production impacts the overall loss ratio on positive side.
5. Normally, small cars or entry level cars attract higher claims frequency since mostly buyers are first time buyers and are likely to increase the collision ratio.
6. Cars bigger in length are on many occasions being chauffeur driven keep the risk at lower side as it completely avoids the practices like using mobile while driving or any such practices. Also, city commuters with chauffer driven cars seems to have far lesser total loss, theft and third party loss incidences.
7. Few models being frequently used in commercial purpose like Innova and Tavera have surprisingly lesser claims ratio in terms of own damage claims, however, theft drives the losses to higher side in such models.
8. It’s normally difficult to establish the loss ratios in models which are too new or not sold much in market. As a result, the trend for such models might change over time.