A Logistic Regression Model for Motor Insurance Claims in Ghana: a Case Study of SIC Insurance Company Limited (SIC)
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Date
2009-08-18
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Abstract
Motor insurance is only the insurance which is compulsory by law. The National Insurance Commission (NIC) which has the responsibility for the insurance industry currently supervises about 21 insurance companies, 2 reinsurance companies, 37 insurance brokerage companies and about 4,500 insurance agents. This number is currently not enough for the ever growing population of the nation. With thc collapse of some insurance companies, there has been the problem of how to handle most of the claims. Also the mere fact that industries in Ghana do not put emphasis on some of the risk factors in estimating motor insurance claims would give room for unfairness in making claim.
It is in line with the foregoing claim problems of motor insurance that this 'study is designed to consider and critically examine some pertinent characteristics (called here risk factors) of the an insured vehicle attributing to motor claims. This was achieved by establishing a logistic regression model using these risk factors: sex of the policyholder, make of vehicle, age of vehicle at point of entry, and cubic capacity of vehicle.
The data were obtained from the Motor Claims Department of SIC Insurance Company Limited (SIC) for the period, 2007 - 2008. The results from the various analyses revealed that only the two risk factors: the vehicle make (FIAT, NISSAN, TOYOTA, BMW), and vehicles aged at least 6 years at point of entry contribute significantly to the prediction of a motor insurance claim. The odds ratios analysis also showed that these makes of vehicle make more claims compared to OPEL while all the relatively old insured vehicles are less likely to make a claim compared to insured vehicles not more than five years old.
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A thesis submitted to College of Science, 2009