Hijacking claims are down
Insurance claims for hijacking and vehicle theft have dropped from 70% of overall claims to 30%. Official crime statistics also show a marked improvement, but this does not mean that insurance premiums will drop.
Vehicle crime has dropped by more than two-thirds over the past 10 years, said Dawie Buys, the South African Insurance Association's motor manager. "It is a known fact that 10 to 12 years ago 70% of all motor claims were due to vehicle crime," he said. Due to various initiatives only 30% of claims are due to vehicle crime now.
The latest crime statistics published by the South African Police Service show that carjacking decreased dramatically by 23.6% to 10600 reported cases in the 2010-2011 year, down from 13900 cases reported in 2009-2010, truck hijacking cases have been reduced by 29.2% from 1400 to 1000, and theft of motor vehicles and motorcycles are down by 10.1%.
Carjacking decreased in all provinces, except the Northern Cape, which had just one additional case. The decreases varied between 39.8% in Mpumalanga and 13% in the Eastern Cape. It was hard to pinpoint the exact reasons for the decline, said Johan Burger, senior researcher for the crime and justice programme at the Institute of Security Studies.
One notable factor is the police's emphasis in recent years on curbing carjackings and business and residential robberies. Burger said house and business robberies had not yet begun to decrease but had stabilised, "but vehicle hijackings started stabilising in 2006-2007 … [and] since 2008 to 2009 they dropped dramatically".
"The police have made a huge contribution, but there may be other factors influencing this downward trend, such as improved electronic surveillance," he said.
Gareth Crocker, communications manager for car recovery company Tracker, which has a recovery rate of more than 80%, agreed. "There is no doubt at all that the vehicle tracking industry is having a massive effect on vehicle crime in South Africa."
Tracker has recovered 58000 vehicles in 15 years, resulting in 10 600 arrests. The company has also shut down 353 so-called chop shops and syndicates. Tracker statistics showed far more vehicle thefts than hijackings, Crocker said.
The tracking industry offers a number of benefits to others. "The insurance industry benefits from not having to pay out on vehicles that previously would not have been recovered. This, in turn, allows them to offer significant discounts on their monthly insurance premiums, which benefits the consumer," Crocker said.
But not all insurance data reflects this decline. Although Outsurance and Santam have had fewer claims related to carjacking and theft, Auto & General Insurance has seen an increase in carjackings.
Auto & General Insurance's claims reflected an increase in the number of hijackings across South Africa, said its spokesperson, Angelo Haggiyannes. "Hijacking remains an ever-growing threat to South Africans … Thanks to better in-built security measures, cars, however, are becoming more difficult to steal. So while Auto & General noticed the number of stolen vehicles dropping, hijackings continue to increase."
For the period January 2011 to date, Outsurance has had a decrease in the number of claims for carjacking and theft.
Santam's statistics also show some declines in claims for carjackings and vehicle theft, although the number is small. In 2010, of 5600 vehicle theft and hijacking claims, 10% were hijack related. In 2011 these claims dropped to 5300, of which 10% were hijackings. The most common crime-related claim is theft of vehicle and equipment stolen from vehicles.
Haggiyannes said that, as incidents went up, the cost of claims went up and premiums rose. If incidents went down, it had the opposite effect.
Natasha Kawulesar, head of client relations at Outsurance, said the company monitored crime statistics and this was factored into its premiums. "A decrease in carjackings would allow our premiums to be reduced to a certain extent," she said.
But Buys said consumers could not expect to see much difference in their premiums because the focus had shifted from crime-related claims to the cost of claims arising from accidents, which were now responsible for 70% of all motor claims.
"Although one may expect that a reduction in crime-related claims would bring about a reduction in future premiums, it is not as simple as that. The overall cost of claims, due to crime and other causes, is the determining factor and all insurers employ actuaries, whose main task is to review their loss ratios on an ongoing basis. This and other factors like inflation are taken into account to determine the level of future premiums," Buys said.
Kawulesar agreed, noting that "accident-related claims form the bulk of our vehicle claims and thus are the highest contributor in determining the premium payable by a client".
Santam also said several factors affected motor insurance premiums, one of which was that only an estimated 30% to 35% of vehicles on South African roads were insured.