Insurers say losses in 2010 grew to $48.9m from $44.5m a year earlier. Reports by Samuel Lee

MOTOR insurance premiums are on the general uptrend as the industry continues to grapple with an unprofitable business, which saw losses widen to $48.9 million last year.

Of the Big 3 motor insurers, only NTUC Income has not increased its premium based on the example of a 32-year-old single man working in a bank and driving a one-year-old Toyota Corolla Altis with zero no-claims discount (NCD).

"We have not adjusted our premiums for more than two years. Therefore the premium for this driver will remain at $2,157 under a similar scenario," said NTUC Income spokesman, adding that the premium would be lower if the driver continues to remain insured with the company since he will now have a 10 per cent NCD.

More importantly, the spokesman said there is an additional one-off $50 rebate for policy renewal in 2011.

"The rebate is given in recognition of our customers' support for helping us achieve a modest underwriting profit in 2010, which was a significant achievement considering the industry was still in the red last year," he said.

According to the General Insurance Association of Singapore (GIA), last year's motor underwriting losses increased from $44.5 million a year earlier, mainly because of flash floods which caused widespread damage to vehicles.

The GIA said there were 428 claims with total losses at $11.6 million.

Over at AXA, the premium for the above profile has risen 17.6 per cent from $2,457 to $2,890 although a 15 per cent discount for an AXA-appointed workshop means the basic premium is unchanged.

"Our premium for this risk is the same as last year's after a 15 per cent discount when consumers opt for the AXA Premium Workshop scheme," said AXA CEO Chua Kim Soon, adding that there are further discounts for safe driving and off-peak cars.

"AXA's pricing is fine tuned regularly according to our underwriting practices, which are based on our claims experience," Mr Chua explained. "We segment our portfolio to ensure that each customer pays the right price for the insurance of their vehicle at all times. Fortunately for this profile, there is no change in the premium."

Currently, AXA has a market share of 14 per cent in terms of premiums, unchanged from a year ago, while NTUC Income's current market share of 20.8 per cent is slightly lower than 21.9 per cent a year earlier.

As for the Big 3 insurers, Chartis, its premium for the above profile has risen 9.3 per cent from $2,956 to $3,232. But the company, previously known as AIG, said a premium is not the sole and key determining factor for selecting the best motor insurance.

"Every plan has different coverage, benefits, restrictions and exclusions," explained Candy Ho, Chartis vice-president for personal lines. "It is important that the general public is educated to evaluate the product from price, service, and product coverage perspective."

Ms Ho said comparing the premium with only one fixed profile "is not representative for the company's overall competitiveness". She added: "To be able to maintain a significant market share in today's competitive motor insurance environment, Chartis as one of the largest motor insurerers in Singapore will have to be competitive in our pricing for a significant segment of the market. Therefore, we do not believe the single profile premium comparison is an accurate barometer in assessing the value of one's auto plan."

Ms Ho also said that with Singapore's auto market remaining unprofitable as at end-2010, Chartis has taken a proactive role by identifying high-frequency accident areas and investing in training and technology to reduce claims cost, among others.

The motor portfolio is an important business for insurers. It makes up a substantial proportion of the general insurance market, accounting for 38.8 per cent in 2010, up from 36.8 per cent in 2009, according to the GIA.

In 2010, the motor premiums totaled $1.04 billion, up 9 per cent from 2009's $956 million, as Singapore's vehicle population grew to a record 945,829 units.