Two companies are interested in motivating their clients to drive safely, taking the coefficient in consideration. Similar model is expected to be introduced in March, said Mr Yurii Todorov, chairperson of the Bulgarian Association for Insurance Safety
Mr Todorov, what is the individual risk coefficient the Association for Insurance Safety is offering?
The model is based on the more searched subjective factor when MTPL risk
is assessed. We think that all objective factor have been depleted as they are real and cannot be changed. The subjective factor is the main impact on the road accidents and the damage. It is the
person, the owner, the driver behind the wheel. 80-85% of all road accidents occur due to human mistakes. The insurance companies in Sweden, Denmark, Canada, Russia began to pay more attention to
the number of violations of the drivers and consider their manner of act on the road when assessing the MTPL insurance risk.
In Bulgaria only part of EU risk indices are taken into consideration and most are just formerly implied in the insurance policies. Traffic Police has its chart of road accident involvement but the
chart is useful for Traffic Police only and it should be useful to the whole society. This very chart can show who is a risky driver and it is the base for our model.
What are the advantages of the model you are offering?
First of all advantages is the possibility for bonuses. The insurance companies do not have any actual bonus system, i.e. the drivers are not motivated to be better drivers. Second advantage -all
drivers are to be treated equally, as they are not treated equally now. Yes, they choose their insurance company by they want to pay the least possible amount, too. Success on the market is
the company that offers the lowest price and the drivers do not actually become the clients of their chosen insurer. The individual risk coefficient allows the drivers to buy MTPL insurance from
the company selling not at the lowest price since they avail themselves of bonuses and reduction in price of, let's say, 30%, 40% in the next year and they become very loyal clients to their
insurer. The drivers will receive discounts in view of their prudence on the road, base don their records kept by Traffic Police.
Who will have access to Traffic Police records?
During our initial talks with Traffic Police we made it clear that it is essential to have an organised complex activity. All data will be protected as it is personal data. The Association for
Insurance Safety is registered in accordance with the Law on Personal Data Protection. And we guarantee that the information will be filled in a form with the clients' consent. We will give this
information to insurance companies and brokers. In the long run we guarantee that all the money paid for these records will go to the Ministry of Interior.
Can't the insurers do it themselves?
Of course they can. But it will be better if all records are kept in one and the same place. If this year a given driver who want to change their insurance company has a coefficient of 0.7 and next
year - 1.2 and submit their last certificate they will buy insurance with coefficient 1.2 taken into consideration. But if his average coefficient for the last 2 years is taken into consideration
the price will be different, depending on the policy of the company.
Is there any actual benefit for the insurance companies from working with individual risk coefficients?
Two companies have already showed interest in the matter. We had talks how will the coefficients be used according to their MTPL insurance sales policy. But it is better to wait for the MTPL sales
rush to pass. I think that in March 2008 we will be able to launch the organisational undertaking.
What part of the market do these two companies hold?
I can only say that the companies have foreign shareholders.
Will you be able to deal with the load of work in short time? MTPL insurance is still sold on campaigns?
A very important question. We are aware that the numerous records will be hard to be processed from November to February. And we think that we have the capacity to manage. There are 3-4 million
drivers in Bulgaria but they will not all rush to get their certificates tomorrow. I think that the ones most willing to get their certificates first will be the ones with most (39) bonus points
who will get the most benefit.
How much will the certificate cost?
Around BGN 10, given that we know how much the reference at the Ministry of Interior costs.
Are the companies taking the risk to lose clients and, respectively, positions on the market?
I do not think so. The practice is not obligatory and not all of the companies will introduce it simultaneously. Each company can decide for itself what policy to conduct.
