JIS News

KINGSTON — Permanent Secretary, Ministry of Industry, Investment and Commerce, Reginald Budhan, is recommending that insurance companies partner with the government to install additional speed cameras at strategic locations in an effort to curtail speeding and indiscipline on the nation's roads.

Mr. Budhan noted that approximately 90 per cent of motor vehicle accidents in Jamaica can be attributed to the careless actions of the driver, such as speeding and dangerous overtaking.

"We in Jamaica have one of the worst motor vehicle accident rates in the world. Something is wrong with us," he stated yesterday (Sept. 13) as he addressed the 12th Annual Shirley Playfair Lecture held at the Pegasus Hotel in New Kingston.

The Permanent Secretary argued that the task of reducing road accidents and curtailing dangerous driving cannot be left solely to the government, but that other key stakeholders, including players in the motor vehicle insurance industry, have a role to play.

Noting that insurance companies share a common database, which provides driver information, including accident history, he suggested that they could jointly sponsor hidden roving cameras that would record speeding motorists and have that information incorporating in the driver history. "This could assist in assessing risk so that people, who speed, pay more," he stated.

The Permanent Secretary further recommended that insurance companies establish a technology-based project, which would enable the police to identify vehicles that are not insured.

"This will increase the demand for insurance and maybe, it could pay for itself if the penalty for driving an uninsured vehicle is high enough. Certainly, the status quo as it is now cannot continue and if we apply our minds, we can find solutions," Mr. Budhan said.

Senior Underwriter Manager, Advantage General Insurance Company, Harold Wong, in his keynote address, noted that motor vehicle insurance companies were particularly concerned about the public passenger vehicle (PPV) market.

In fact, he informed, most companies no longer offer coverage for that sector because it has proven to be too risky.

"In this particular segment of the market, insurance is not readily available. Approximately two to three years ago, most companies did PPV insurances, but this particular market was driving cost ratios in excess of 100 per cent and as a result, there is the recent exit from the PPV market of several insurance companies," he stated.

Mr. Wong said that currently, only three companies accept PPV business, with one company accepting it only on a third party, driver only basis, and the other company is "very selective, restrictive, and very inflexible in terms of their underwriting criteria," while the third company is Advantage General.

Mr. Wong argued that despite the cries of PPV drivers that insurance is not readily available, he noted that based on the loss ratio index the market has proven to be extremely unprofitable for insurance providers. 

"Much as we would like to, we cannot correct the situation by rate increases, because what is now happening is that a large percentage of PPV operators are now operating under private third party coverage," he stated.

"Right now, we have to be trying to capture them in our database and say ‘listen based on information from the Transport Authority your vehicle is licensed as a PPV and it must be insured as such,'" he said.

Mr. Wong noted that several meetings have been held with various stakeholders to correct the problem and to see if a consensus could be arrived at in favour of both the insurance companies and the PPV operators, he  however argued that the concerns were just too numerous.

Among the issues are:  bad driving habits of many PPV drivers; non-compliance with rules pertaining to safe driving; obtaining of licenses without due process; and a general culture of indiscipline among such drivers.

The annual Shirley Playfair Lecture series focuses on competition law and policy and seeks to facilitate healthy discussions on competition in a public forum. The event, which is organised by the Fair Trading Commission (FTC), was held this year, under the theme: ‘Coordinating to Compete: Limitations in the Motor Vehicle Insurance Market'.

Other presenters included: Deputy Executive Director, Financial Services Commission (FTC), Leon Anderson; Insurance Specialist, Cedric Stephens; and Legal Officer, FTC, Wendy Duncan.

The lecture was held for the first time in September 2000 to honour the life and work of Mrs. Shirley Playfair, who died tragically while serving as the agency's first chairman.

By Athaliah Reynolds, JIS Reporter