Homogeneity
of risk, probability of occurrence, severity, spread, law of large numbers and
more .. go into insurance pricing !!
Present bunch
of Insurance may be surprised to read that Marine Cargo Insurance for
long was considered a profitable business for the Insurers – Apr 1994 sounded a
death knell to that perhaps ! In
earlier days, the rates and terms of Marine Cargo Insurance was governed by
‘All India Marine Cargo Tariff” and there were only 4 Public Sector Insurers
transacting business. For those of you new to Insurance business, a Tariff is a schedule of premium rates and policy terms and
conditions applicable to risk in a
particular class of business. It was
the guide book – a stricter and stronger directive given by the TAC to the Four
transacting companies and any any
violation of rates, terms and condition as prescribed by TAC in the tariff literally meant violation
of Insurance Act 1938 itself.
Viewed in hindsight, the
rates were fabulous. For
bagged cargo, for inland transit risks, the Basic coverage (Inland Transit – B)
rate would be 0.20% -Underwriters were permitted to add specified perils to
this and for tearing and handling losses it was 0.05%; another 0.05% for rain
water damage; another 0.05% for shortage and a similar value for non delivery
and so on…. –
the ‘All Risks’ rate for a non-hazardous cargo (paddy, rice, wheat, sugar, de-oiled
bran and the like) in gunny bags would be not less than 0.41% + SRCC rate @
0.0225% - thus
for 1,00,000/- sum insured, the premium collected would be closer to Rs.500/-
No post on Marine
Insurance ~ though the truth was hard-hitting, Insurers did not learn .. ..
years later there were talks that risks were not being priced adequately – and that
one need to distinguish between good and bad risks and .. .. and discount rates
for the good !! ~ so, a decade ago, Property and Motor Insurance too followed the
suit .. .. price war ensued! – the reforms were to promote a free market,
risk-based pricing, and a level playing field – but ended up T- .. .. what 100%
Heard of ~
Cynophobia ! Dogs - one of the most adored pets –Dogs are
considered man’s best ally and among the most sought after pets ~ to some they
bring endless joy and fun. For many, they are too scary….
Among
various General insurance policies, is coverage for pet animals, more
specifically dog insurance. In India,
this policy offers coverage to indigenous, crossbred and exotic dogs which are
pets, watch dogs, sheep dogs… and provides coverage against death due to
accident and / or diseases during the period of insurance to the dogs. The insured animal must be suitably identified by tattooing; nose print; photograph etc.,
Normal physical identification marks and breed, sex, age etc. should be clearly
described in the Veterinary Certificate and Proposal form. The Policy can be
extended to cover transit risks as also
accidental poisoning and the like.
There is liability arising out bites too. Policies would exclude rabies, canine
distemper and the like.
In Foreign
countries, there is Dog bite law. In US most States have statute imposing
liability on dog owner for all dog bites, irrespective of whether the dog was a
good dog or not. The victim gets
compensation from the dog owners homeowners or renters insurance. In some places, the liability would ensue
only when the owner could be accused of negligence, intentional or violative of
a leash law or other animal control law.
There is also some debate on "dangerous" and
"vicious" dogs. ~ and this can be insured too. Now comes the news – a MailOnline article
that it is so expensive to insure dogs that they gulf the premium paid for a 4x4, new
research has revealed.
AA
insurance's comparison of policy prices found that some breeds are pricier to
cover than a family car. It found that a Great Dane, for example, has an annual
pooch premium of £1,100. This is twice the cost of insuring a £58,000 BMW X5
SUV for a year. That means a big German
dog is more expensive to cover than a big German motor. The Great Dane is, according to the analysis,
the priciest of pups to insure, but other favourites among pet-loving Britons
have also been found to drive sky-high cover charges. In fact, six breeds in
total cost more to insure for 12 months than the two-tonne BMW family car - and
not all of them are that big. This is according to the AA's pet insurance
database, which was compared to the cost of motor cover for relatively popular
vehicles. The study looked at pet premiums based on the provider's Gold Plus
cover for a one-year-old male dog and premiums for a one-year-old car belonging
to a 38-year-old drive with protected no claims.
The AA said
there were similarities in the cost of ownership when considering man's best
friend and a vehicle. The insurance provider said: 'Most drivers understand
that as cars get older, it can cost more to repair them and keep them on the
road. 'Similarly, dogs can suffer from age-related illness and can also be
susceptible to breed-dependent ailments.' The comparison pitted the Rhodesian
Ridgeback against the £40,000 Audi Q5 and found the four-wheeled motor was
almost £300 cheaper to cover than the four-legged animal. Another insurance
head-to-head was the Giant Schnauzer, costing £599 to insure, and the £40,000
Mercedes-Benz GLC, which rung in at £434.91.
Janet Connor, director of AA insurance said: 'It's important to
carefully research the exact type of dog that is right for you and your family
and be sure that you are fully prepared to dedicate the time and finances
required before you buy.
'With recent
trends towards owning exotic or designer dogs and unique cross breeds, it has
never been more important for people to consider all of the potential costs
associated with dog ownership. 'A premium pooch can end up costing so much more
than the original price tag and, over its lifetime, a dog can make a big dent
in your family finances.' Last month, the AA said
car insurance premiums were once again on the rise following a period of falls.
It said an annual comprehensive car
insurance policy for an individual who shops around stood at £610 on average in
the fourth quarter of 2018 - an increase of 2.7 per cent over the quarter, but
still down 5.9 per cent over 12 months.
City
regulator the Financial Conduct Authority last year launched an investigation
into how insurers are pricing their premiums. Part
of the problem is automatic motor insurance renewal quotes, which are rarely
lower than the previous year's premium. If a driver
fails to accept them, they have to go through the rigmarole of a price
comparison website. Some users felt that
: 'We can see what questions we're being asked, but it's not clear how these
are being used to generate a price — or what other factors they are taking into
account. 'There are no real boundaries around what's
fair — so we're increasingly seeing insurers take questionable decisions on
pricing.'
Cynophobia is the abnormal fear of dogs.
It is classified as a specific phobia, under the subtype "animal
phobias”. Whether you have mortal fear or not, it makes sense to stay away from
an angry dog….
the
only dog that I loved is no more ! the
lumpen feeling reading the travails of the little Jeeno, in the most interesting
Sci-fi of Sujatha - ‘En Iniya Iyanthira
’ and Meendum Jeano’ -– the story of
robotic dog woven subtly around a dictator who keeps the Nation under tight
grip. The pet robot dog which can think beyond humans, assists the dumb Nila in
search of her spouse Sibi into bigger things.
Towards the end, the cute exceptionally dog loses it memory and back up
and fades away ! Illogical it might sound, it was afterall a story – yet, I felt very sad reading of its end.
With regards
– S. Sampathkumar
18th
Feb 2019.
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