Weich Rumjan is not happy. This taxi driver had to renew his car insurance in May : ?I was so shocked by the tremendous increase: it went from Rs 14,500 to Rs 41,000.? Broadly speaking, the tendency is going up. Yet, as spectacular this case may be, there is no uniformity in the rise of motor vehicle premiums as each company has its own strategy.

?Car insurance is not social security. One must take one?s responsibilities?, declares Axel Pellegrin, secretary general of the Insurers? Association. The mechanism is calculated on the level of risks. If the risk is high, the premium is consequently high. A very big car is insured at a higher cost than a small vehicle.

?The number of accidents has also increased, the sums to cover, and consequently the premiums?. One cannot expect the rates to remain the same after repeated accidents. This has been the case for Weich.

One has also to take in account the rise in the price of accessories, the introduction of electronic spare parts that cannot be repaired and thus have to be imported and the depreciation of the rupee since everything comes from abroad.

?The motor vehicle insurance market is very sensitive. For those who were never involved in accidents, there is an inevitable increase of about 12% for private cars and of 20% for taxis?, reveals Kiran Ancharaz, Mauritius Union Main Branch Manager.

Though, the market by large is still worthwhile? and profitable. Some insurance companies have even developed marketing techniques to attract potential holders with promotional rates.

At GSA, Abdel Ruhomutally, deputy managing director, speaks of competitive rates, that are not cheap, but are sensibly calculated. The third-party insurance may have doubled but surely not the comprehensive insurance, except in cases where the risks went higher. Abdel Ruhomutally considers that the Mauritian context is not so unfavorable for policy holders: ?Abroad the premiums are much more expensive. 10 years back in the United Kingdom, I had to pay Rs 16 000 for my car.?

Coming to the ?taxi and the contract car business?, Kiran Ancharaz evokes a ?very restrained segment, which attracts very few companies?. Which represents loss for them. Many insurers have stopped to cover these types of risks, while some, which did continue, have had to close down or to face serious financial problems.

Not all risks justly shared

One example is that of Rainbow Insurance. Even some of the leaders, Swan Insurance, have suffered considerable loss too, with Rs 12 million deficit for the three first months of January.

Yet this does not solve Weich?s problem. ?This car is my livelihood. That the insurance must limit its losses may be well. But I have been jobless for three weeks as I have had to wait one week for the expertise to be carried out, another week for the insurance to make its report, and another one to know what quantum is fixed to pay the repairs.? Meanwhile Weich stresses he has to take without delay from his pocket Rs 10,000 to pay the excess fees. ?I have the feeling that not all the risks are being justly shared.?

Then, as genuine may be Weich?s situation, the insurance sector may also be reacting to widespread malpractice, which accompanied the introduction of the agreed statement of facts (ASF) forms (constat à l?amiable).

Most insurance companies speak of suspect cases, where vehicle owners try to cheat the insurance by arranging make-believe collisions with an accomplice driver. ?The association is all too aware of deliberate attempts to defraud insurance companies through fake accident claims, which in many cases bear the hallmarks of organized crime?, pointed the Insurers? Association president, Louis Rivalland in a speech in March 2007. ?There is merely no control possible on these cases?, underlines Axel Pellegrin.

Yet there is still room for debate. Sunil Dabeedyal, assistant secretary at the Motor and Vehicle Insurance Arbitration Committee (MVIAC), does not approve every stand from the insurers? side.

For him, the aim behind the revision of the Road Traffic Act is ?to enable insurance companies to comply with the decisions of the Committee?.

He does not believe that the rise in accident cases is so decisive: ?If you look to 2007 statistics from Central Statistics Office, the number of cars involved in road accidents did rise but not that much?: from 19,573 from January to June 2006, the figure rose to 19 931 for the corresponding period in 2007.

Wrong completions of forms

The MVIAC, composed of representatives of insurance companies, of the National Transport Authority and of engineers, mainly deals with disputes over minor road accidents (collisions) in relation with ASF. Sunil Dabeedyal has thus a valuable point of view on the situation. ?99% cases are reported by the insurers. Between 100 and 150 cases are treated each week and quantum involved go from Rs 500.?

According to Sunil Dabeedyal, ?some insurance companies are reticent to pay in time after the Committee?s ruling?. In some cases, the ASF forms are improperly completed and this slows down the procedures. ?I do not know one company who does pay out under the prescribed 21 days?.

Yet, some insurers, like Kiran Ancharaz, speak of the ?many instances (in which) we have had to wait for months before the ruling. After a certain delay, we have to restart all the procedures?.

Weich Rumjan did not complain to the MVIAC. He chose to apply for another insurance company. Following the same law of the market that seemed to justify the rise in his premium rates.