The underwriting of motor insurance for young drivers : alternative methods used to minimise risk and reduce premium charged

Abstract

Motor insurance is the most common type of non-life insurance in the Maltese Islands, particularly because it is compulsory for anyone who owns and drives a motor vehicle. On the other hand, traffic accidents are the main cause of mortality for young people and hence it is an important topic that affects the safety of young drivers and of the other drivers and pedestrians. Young drivers all over the world are being subjected to very high premiums, while statistics are indicating that they incorporate a higher risk when compared to other age groups. Therefore this dissertation gives a general analysis of what occurs in the underwriting stage whenever an insurance policy is required, and then looks at recent statistics in order to see if the situation in Malta truly reflects the perception people have about this topic. The main objective of this dissertation is to investigate what alternative methods could be used so as to minimise risk and at the same time reduce the premium charged. This will be tackled in the final part of this dissertation, while the first few chapters will ensure that the reader has a better grasp of the subject, and can conclude whether these solutions could be actually used in order to solve the problem.