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.