An assessment of the factors influencing auto insurance claims: a case study of India.
Abstract
The major objective of the study was to investigate factors that affect auto insurance claims in
India. Secondary data was used and it was got from the website kaggle.com which had a total
population of 127037 beneficiaries and the analysis of the data was done using Stata which
involved use of frequency tables, statistical tests like one-way ANOVA and multiple linear
regression.
The results indicated that 99% of beneficiaries had driving license. Most of the beneficiaries were
males (53.7%) and fifty five percent of the population had their age in years ranging from 20 - 39.
Majority of the vehicles (52.5%) had lasted for 3 years and below, 53% of the vehicles insured
were damaged at the start of the contract and approximately 49.8% of the vehicles were without
damages.
The results showed that a unit switch age group from 20 to 39 to 60-85 increased the claims by
large amount (5504.504). A unit increase of beneficiaries with a driving license decreased claims
for auto insurance by 2742. Also a unit switch of the beneficiary’s vehicle which had lasted for 3
years and below to 6 years above increased claims by large amount (4191.133). Lastly a unit
increase in vehicles which were damaged increased auto insurance claims by 273.3 more than
vehicle which had no damages.
The researcher concluded that as the policy holder approaches 60 years and above increases claims
because of extra expenses that arise from getting old like diseases which are covered when he or
she gets an accident. Beneficiaries with driving license reduced claims and as the vehicle lasts long
in existence (6 and above years) increases the claims by large amount due to poor mechanical
conditions. And lastly vehicles which were damaged increased claims.
Therefore it is important that the auto insurance companies set the standard of the vehicles to be
insured basing on their age of existence and their present mechanical conditions and doing
continuous medical checkups of policy holders who are old. Also the government should intervene
and make every driver to have a driving license since it is a sign of good driving skills.