Combating escalating motor claims

Someone asked for my views on why the "motor claim framework", which was introduced two years ago to combat the escalating claims, did not work. This question should more properly be addressed to the parties that introduced this framework, rather than to me.

This framework was introduced by the General Insurance Association with the support of the Monetary Authority of Singapore. They should explain what has happened, what had failed and what they are doing about this matter.

Why did I say that the framework did not work? I recall that the framework was intended to bring down the claims and keep motor premiums from escalating. From anecdotal evidence, it seems that the motor premiums continued to escalate sharply during the past two years. Clearly the framework had failed to achieve its primary purpose.

When the framework was first launched, there were media reports that motorists can wait at the roadside and ask for a surveyor to arrive on the spot to settle the claim or arrange the repair. At that time, it was quite clear to me that this proposal was impractical, but the people who promoted this framework was confident that it would be the silver bullet to solve the underlying problem. It did not work.

It seems that nobody really wants to put to find a solution. They are only interested to make a show of dealing with the problem. Most of the parties involved actually benefited from the escalating claims - the repair shops, the lawyers, and the insurance companies. The only parties that suffer are the consumers, who has to pay higher premiums.

The consumers do not have the power to hold anybody accountable for the escalating premiums. Their complaints will be ignored and will be brushed off as the price for living in an advanced country. If consumers have to pay higher petrol prices and ERP, what is a few dollars more in insurance premiums?

The trouble is that this attitude will lead to wastefulness, which is now acceptable as being part of life in Singapore. It is now a Singapore culture to pay a lot of money on infrastructure and systems (instead of going for cheaper solutions) and passes the higher cost to consumers.

What is the underlying cause of the escalating motor claims, which was not solved during the past three decades? It is caused by fraudulent claims, not only for repair claims but for injury claims as well.

These fraudulent claims cannot be handled by the insurance executives, who do not have the power to deal with crime. They have to be handled by the people with the power, namely the Government. If the Government does not wish to deal with fraudulent claims, then the problem can never be solved.

Tan Kin Lian