SINGAPORE - NTUC Income's decision not to renew the motor insurance
policy for Mr Tan Yau Cher's family ("No insurance renewal for
dangerous driving..."; Wednesday) in reply to Mr Tan's letter
("Don't let insurers leave car owners in renewal fix"; last
Saturday) has created much discussion.
Clearly, opinions are divided and we thank the public for sharing
their views.
We would also like to explain our decision.
First, the facts.
The policy was not held in Mr Tan's name but an older daughter's
name - the policyholder.
The accident happened when his younger daughter was driving the
car.
A video provided compelling evidence of absolute recklessness which
cannot be ignored.
Generally, when we insure a motor policyholder, we insure the
totality of risk and this will include accidents caused by drivers
authorised or allowed by the policyholder.
In order to keep the rates of premiums affordable to the larger
pool of our motor policyholders - the vast majority of whom are
safe drivers - we exclude policyholders whose claims experience is
excessively poor due to their own fault.
Mr Tan's older daughter's claims experience falls into this
category. Our standard operating procedure is not to invite such
cases for renewal.
In his letter, Mr Tan mentioned that other insurers have provided
him quotes, albeit with high premiums.
These rates are reflective of the risks associated with unsafe
driving behaviour. I would encourage him to accept one of these
offers.
However, if Mr Tan's older daughter wishes to continue her
insurance with NTUC Income, I invite her to contact us, but we
would exclude her younger sister from the coverage.
This is an unusual practice for family cars. However, this is what
we need to do so that we can provide an existing policyholder with
the choice to insure with us.
Nevertheless, I would like to add that the premiums will still
carry a significant loading.
This is necessary to deter anti-selection, the process where we
inadvertently attract family units with bad driving behaviour to
insure with us.
Such anti-selection would cause our overall premiums to rise - to
the detriment of the majority of our motor policyholders.
We welcome this opportunity to explain our decision.
Arising from this, we will make clearer in our motor insurance
contracts that if you drive recklessly, you put the renewability of
your car insurance at risk.
Tan Suee Chieh
Chief Executive (NTUC
Income)
