2010 Motorcycle Risk Study Update

Transcription

1 2010 Motorcycle Risk Study Update Introduction This report provides an update to the Motorcycle Risk Study from AI.16 of the 2005 Rate Application. The original study was in response to Public Utilities Board Order 173/03 #4, which stated: Manitoba Public Insurance gathers data and studies the causes of motorcycle risk, to assist in the categorization of motorcycle accidents and investigates whether a form of graduated licensing and or mandated training for motorcyclists would be appropriate, and report back to the Board at the next general rate application. In addition to updating all the relevant aspects of the original report, this report also provides new motorcycle risk data on: Large Losses Engine Size Accident Location Policyholders versus Drivers All Purpose and Pleasure Use Wildlife Claims Page 1

2 General Information 1. Overall motorcycle frequency has been gradually declining from a high of claims per 1,000 units in 2002 to a low of claims per 1,000 units in Over the same period, May-to-September private passenger vehicle claim frequency has remained relatively constant at about 66 claims per 1,000 units. Claims per 1,000 Units Insurance Year Motorcycles % Change May-Sept Private Pass. % Change % % % % % % % % % % % % % % % % % % *Private passenger data excludes Comprehensive claims Page 2

3 2. The number of motorcycles continues to grow faster than the number of passenger vehicles. From 2005 to 2009 motorcycle units increased at an annual rate of 4.0%, while passenger vehicles increased at an annual rate of 1.7%. The growth in motorcycle units is driven mainly from an increase in Touring bikes, which increased by approximately 1,500 units since The number of Sport bikes has been declining by about 4.5% per year while the number of Other bikes has remained relatively constant over the past eight years. Earned Units by Body Style Insurance Year Motorscooter (> 100cc) Other Sport Tour Total Major Class ,529 1,247 1,894 7, , ,681 1,217 2,060 7, , ,322 1,113 2,085 7, , ,301 1,033 2,187 7, , ,543 1,058 2,436 8, , ,760 1,008 2,724 8, , ,823 1,008 3,126 9, , , ,383 9, ,527 3 Year 72.4% 0.5% -5.1% 11.6% 4.3% 1.9% 5 Year 71.0% 1.3% -4.1% 10.2% 4.0% 1.7% 7 Year 74.2% 0.3% -4.5% 8.6% 2.6% 1.5% 3. The decline in overall motorcycle frequency is a result of a decline in (i) the number of Sport bikes in the population and (ii) the claims frequency of Sport bikes. Sport bikes, which have a claim frequency that is three to four times higher than non-sport motorcycles, have seen a 27.6% reduction in units since 2002 (from 1,247 to 903). Sport bikes also experienced a downward trend in claims per 1,000 units, especially in the last two riding seasons. Non-Sport claim frequency has remained very stable at about 40 claims per 1,000 units over the past 9 years. Page 3

4 Claims per 1,000 Units (Sport vs. Non-Sport) Insurance Year Sport Non-Sport Motorcycles Motorcycle injury claim severity is about four times higher than passenger vehicle injury severity, while motorcycle physical damage severity is about two times higher than passenger vehicle physical damage severity. Severity by Type of Claim Five Year Average Type of Claim Injury Physical damage Total Motorcycle Severity $43,120 $3,792 $17,052 Motorcycle Severity (Cap at $500K) $33,606 $3,792 13,844 Private Passenger Severity $9,707 $2,063 $2,841 Private Passenger Severity (Capped at $500K) $8,896 $2,063 $2, On an incurred-to-date basis, over 85% of motorcycle losses are for injuries while about 35% of private passenger losses are for injuries (note: excludes comprehensive claims for passenger vehicles). Percentage of Total Incurred to Date Losses by Type of Claim Five Year Average Type of Claim Injury Physical damage Total Motorcycles 85.3% 14.7% 100.0% Private Passenger Vehicles 34.8% 65.2% 100.0% Page 4

5 6. About 50% of motorcycle accidents involve injuries, while about 10% of passenger vehicle accidents involve injuries. Motorcycle Claims by Type Loss Insurance Year Injury Physical damage Total Claims Percentage of Injury Claims % % % % % % % % % % % % % % Total 1,978 3,952 5, % Motorcycles Five Year Avg % Private Pass. Five Year Avg. 4,670 41,221 45, % 7. About 45% of motorcycle claims are single vehicle and about 20% of passenger vehicle claims are single vehicle. Single Vehicle Claims as a Percentage of Total Claims Private Passenger Insurance Year Motorcycles Vehicle % 20.0% % 20.3% % 22.0% % 20.7% % 21.6% % 21.7% % 21.8% % 22.0% % 21.6% 5 Year Average 46.6% 21.8% Page 5

6 Rating Territory 1. The majority of motorcycles (93%) are registered in territories 1 (Winnipeg) and 2 (areas surrounding Winnipeg). Compared to territory 2, motorcycles in territory 1 have a higher physical damage frequency (54% higher) and a higher injury frequency (44% higher). Frequency by Type of Claim & Rating Territory Five Year Average Physical Unit Rating Territory Injury Total damage Distribution % % % % % Total % 2. The lower claim frequency in territory 2 (compared to territory 1) is offset by a much higher claims severity. Territory 2 claims severity is 76% higher than in territory 1. Severity by Type of Claim & Rating Territory Five Year Average Rating Territory Injury Physical damage Total 1 $31,939 $3,364 $12,844 2 $56,346 $4,102 $22,254 3 $33,636 $5,872 $11,822 4 $17,408 $4,995 $7,797 5 $20,917 $3,870 $9,793 Total $43,120 $3,792 $17,052 Page 6

7 3. Over the past five years, the highest reported losses per unit were in territory 2. Rating Territory Reported Losses per Unit 1 $886 2 $1,019 3 $375 4 $301 5 $845 Total $940 Use All Purpose vs Pleasure 1. To date the Pleasure motorcycle use has had lower claim frequency than the All Purpose motorcycle use; however, the relationship has been highly variable from year to year. Based on the four year average, the frequency of Pleasure use is about 7% lower than All Purpose use. Frequency by Type of Claim & Use Year Injury Physical damage Total All Purpose Pleasure All Purpose Pleasure All Purpose Pleasure Total Unit Distribution 42% 58% 2. To date the Pleasure motorcycle use has had a lower claim severity than the All Purpose motorcycle use; however, the relationship has been highly variable from year to year. Based on the four year average, Pleasure claims severity was 22.3% lower than All Purpose claims severity. Page 7

8 Severity by Type of Claim & Use Year Injury Physical damage Total All Purpose Pleasure All Purpose Pleasure All Purpose Pleasure ,350 29,295 3,969 3,154 29,200 12, ,520 60,596 3,663 3,557 12,634 21, ,107 22,405 4,170 4,196 11,919 10, ,903 37,124 4,665 3,759 12,626 14,845 Total 49,299 37,463 4,061 3,758 19,373 15,056 Changes in the Motorcycle Risk Pool 1. Significant changes in the distribution of earned units by body style have occurred over the past eight years. In regards to claims frequency, the most significant change was the reduction in the number of Sport bikes from 16.2% of the population to 9.8% of the population. Touring bikes increased from 24.7% of the population to 36.8% of the population. Distribution of Body Style Earned Units by Year Motorscooter Insurance Year (> 100cc) Other Sport Tour Total % 59.0% 16.2% 24.7% 100.0% % 58.7% 15.3% 25.8% 100.0% % 57.3% 14.8% 27.6% 100.0% % 57.0% 13.7% 29.0% 100.0% % 56.1% 13.1% 30.1% 100.0% % 55.2% 11.7% 31.6% 100.0% % 52.5% 11.0% 34.1% 100.0% % 50.2% 9.8% 36.8% 100.0% 2. The distribution of motorcycles by engine size has been constant in the small (0 to 500cc) category; however, there has been a shift in the population from the medium engine size group ( cc) to larger bikes (>1000cc). This shift is partially from the decrease in the number of Sport bikes in the population, most of which are in the cc category. Page 8

9 Distribution of Motorcycle Earned Units by Engine Size Insurance Year 0 500cc cc >1000cc % 35.4% 53.3% % 34.0% 54.8% % 32.0% 56.5% % 29.9% 58.1% % 27.4% 60.7% 3. The distribution of motorcycles by rate group has gradually shifted to higher rate groups. For example, the percentage of motorcycles insured in the first three rate groups dropped from 26.2% in 2004 to 12.9% in Distribution of Motorcycle Units by Rate Group Ins. Year % 9.8% 7.8% 14.1% 12.5% 11.9% 6.5% 2.9% 2.2% 0.0% % 9.0% 7.7% 14.5% 12.8% 12.1% 6.8% 4.9% 0.7% 0.0% % 7.6% 6.8% 14.2% 13.6% 13.8% 7.7% 6.4% 0.6% 0.1% % 7.0% 6.5% 13.9% 13.8% 14.4% 8.4% 7.4% 0.7% 0.0% % 7.2% 6.1% 13.8% 15.1% 15.8% 8.3% 8.1% 1.0% 0.1% % 6.3% 6.0% 12.7% 16.0% 17.7% 9.1% 9.1% 1.7% 0.1% % 5.7% 5.2% 11.7% 16.3% 18.5% 9.5% 10.2% 2.9% 0.3% % 4.5% 4.6% 10.6% 17.0% 20.0% 10.3% 12.3% 3.2% 0.4% % 4.4% 4.0% 9.7% 17.5% 19.8% 11.1% 13.9% 3.1% 0.5% % 3.8% 3.8% 9.1% 18.5% 20.1% 12.0% 14.8% 2.5% 0.6% % 3.1% 3.5% 9.4% 18.5% 21.3% 13.5% 15.4% 2.4% 0.6% % 2.6% 3.1% 9.7% 19.1% 22.2% 15.1% 15.2% 2.2% 0.5% % 2.0% 2.8% 9.8% 20.2% 22.2% 16.2% 15.8% 2.3% 0.6% Page 9

10 Body Style 1. Sport bike claim frequency is more than three times higher than any other body style category. The non-sport motorcycle categories (Other, Touring, Motorscooter) all have similar claim frequencies. Claims Frequency by Body Style since 2002 Motorscooter Body Style (> 100cc) Other Sport Tour Total Claims 42 1,423 1, ,822 Units ,569 8,588 19,893 66,074 Claims per 1,000 Units Injury claim frequency is also more than three times higher for Sport bikes than for any other motorcycle body style. The non-sport body styles also have very similar injury frequencies. Frequency by Body Style since 2002 Motorscooter Body Style (> 100cc) Other Sport Tour Total Physical damage Injury Total The severity of Other and Touring is about two times higher than Sport bikes and three times higher than Motorscooters. Severity by Body Style since 2002 Motorscooter Body Style (> 100cc) Other Sport Tour Total Severity $6,141 $18,522 $9,577 $17,028 $14,684 Severity (Capped at $500K) $6,141 $15,529 $7,677 $16,155 $12,533 Severity by Body Style and Type of Claim since 2002 Motorscooter Body Style (> 100cc) Other Sport Tour Total Physical damage Severity $1,444 $3,116 $3,613 $5,158 $3,735 Injury Severity (Cap $500K) $17,883 $36,572 $17,545 $35,234 $29,802 Riding Habits Page 10

11 1. According to the telephone survey, more than 60% of motorcycle riding takes place on highways. 2. Motorcyclists are more likely to be recent claimants if they drove more than 10,000 kilometers in the last year. These results suggest that risk increases with kilometers driven. How many kilometers did you drive in the last riding year? Kilometers Driven Claimants Policyholders <5000kms 68 37% % kms 60 33% % 10000kms % % Total % % 3. Out-of-season motorcycle claims (i.e. October to April) represent about 20% of overall motorcycle claims, or about 10 claims per 1,000 units. Motorcycle Claims per 1,000 Units Outside Riding Season Claims Total Claims % Outof-Season Insurance Year Claims per 1,000 Units per 1,000 Units % % % % % % % % % % % % % % Page 11

12 4. The telephone survey indicated that about 40% of policyholders ride in the months of March and April while about 70% of policyholders ride in the months of October and November. These results are very similar to the 2004 survey (41%/65%). 5. About 80% of motorcycle accidents occur in the territory where the bike was registered. These results suggest that policyholders are generally registering their bikes in the territory where most of their driving occurs. Claim distribution by Rating Territory and Location of Claim Five Year Average Rating Territory Territory 1 Territory 2 Commuter Total Winnipeg ,230 Outside Winnipeg ,066 % of Claims in WPG 83.0% 24.0% 65.3% 53.6% 6. In 81% of motorcycle claims the policyholder is the claimant, compared to 63% (2009) for private passenger vehicles. Based on the motorcycle survey, 96% of motorcycle policyholders said that they were the only person riding the motorcycle. These statistics suggest that the premiums (i.e. premium discounts) charged to motorcyclists are a reasonable reflection of the risk presented by the drivers of the motorcycles. Page 12

13 Driver Experience 1. Almost half of motorcycle policyholders have ridden a motorcycle for more than 20 years. Inexperienced riders (i.e. one to three years experience) make up about 16% of the policyholder population. Claimants are much more likely to be inexperienced riders. How many years ridden a motorcycle? Policyholders Claimants 1 to 3 16% 25% 4 to 10 20% 30% 11 to 20 16% 14% % 31% 2. As a group, Sport bike policyholders have much less experience than non- Sport policyholders. How many years have you ridden a motorcycle? Sport Non-Sport 1 to 3 34% 13% 4 to 10 27% 19% 11 to 20 18% 16% % 51% 3. 37% of motorcycle policyholders have taken training. Sport bike policyholders were the most likely to have taken training at 58%. Page 13

14 Engine Size 1. Non-Sport claim frequency increases as the engine size increases. (Note: Sport bikes were excluded because 80%+ of the bikes are in the cc category and their extremely high claim frequency distorts the overall results). Non-Sport Claim Frequency per 1,000 Units since 2005 Engine Size Non-Sport 0 500cc cc 38.0 >1000cc Non-Sport claims severity increases as the engine size increases. Non-Sport Claim Severity since 2005 Body Style Non-Sport 0 500cc $12, cc $15,764 >1000cc $21,503 Page 14

15 Large Losses 1. In a typical year about ten motorcycle claims are responsible for over 50% of the incurred losses. For passenger vehicles about 15% of losses are from large claims. Claims in excess of $100,000 Insurance Year Claims >$100,000 Motorcycle Large Losses % of Total Claim Count % of Total Claims Incurred Private Passenger Vehicle Large Losses % of Total Claim Count % of Total Claims Incurred % 53.6% 0.1% 22.8% % 40.0% 0.1% 10.1% % 39.5% 0.1% 13.3% % 37.7% 0.1% 16.0% % 31.5% 0.1% 20.2% % 57.4% 0.1% 17.3% % 69.6% 0.1% 23.7% % 58.6% 0.1% 20.7% % 19.6% 0.1% 9.2% % 44.7% 0.0% 5.3% 5 Yr Avg 2.3% 54.3% 0.1% 15.7% 2. Motorcyclists are at-fault in about half of their large loss claims. Serious Loss Claims Separated by At-Fault Claims Since 2000 At-Fault Serious Claims Not At-Fault Serious Claims % At-Fault % Page 15

16 3. Large loss claims are more likely to occur in rural territories. Although rural territories account for about 50% of units and 45% of motorcycle claim counts, they account for 66% of large loss counts. Large Loss Claims in Manitoba (Winnipeg vs Rural) Serious Loss Claims Unit Distribution Winnipeg Rural Manitoba Outside Manitoba % of Large Loss Claims that Occur Outside of WPG % 50.2% 49.8% 0.0% 4. Large (1001 cc+ engine size) non-sport motorcycles are the most likely to have a serious loss. Over the last five years, this group had 67% of motorcycle serious losses and 59% of units. Page 16

17 Wildlife Claims 1. With the exception of the 2007 insurance year, motorcycle wildlife claim frequency has remained fairly constant at about 3.5 claims per 1,000 units. Motorcycles have a lower frequency of wildlife claims than passenger vehicles. Wildlife Claim Frequency Insurance Year 2. Wildlife claims account for about 7% of losses for motorcycles, which is similar to private passenger losses. However, injury losses from wildlife claims contribute about seven times more to overall motorcycles losses than for private passenger vehicles. Physical Damage Claims Injury Claims Total Claims per 1,000 Units Passenger Vehicles (5 Yr Avg) 5.65 Wildlife Claims Incurred Compared to Total Incurred Since 2000 Physical Type of Claim Injury damage Total Wildlife $4,079,809 $792,532 $4,872,341 All Claims $54,986,707 $11,409,881 $66,396,588 Wildlife as % of Total 7.4% 6.9% 7.3% Pvt Passenger Wildlife as % of Total 1.1% 10.3% 7.1% Page 17

18 Conclusion Since the last Motorcycle Risk Study six years ago, the Corporation has made significant changes to motorcycle rates based on the risk characteristics identified in the original study. These changes are outlined below: 1. Body Style: a. Relativities: Loss data indicates that Sport bikes should pay at least three times more than Other and Touring bikes. In 2005 the Sport bike relativity was only 33% higher than the average Other/Touring relativity, but in 2011 (proposed) the Sport bike relativity is 56% higher than the average Other/Touring relativity. b. Classifications: The Corporation has begun using Insurance Bureau of Canada body style classifications in the 2011 Rate Application. This will give a more accurate description of motorcycle body styles. 2. Territory: Loss data indicates that territory 2 rates should be at least as high as territory 1 rates. However, in 2005 territory 1 rates were 95.6% higher than territory 2. In 2011 (proposed) territory 1 rates are now only 17.2% higher than territory Engine Sizes: The frequency and severity of claims increases as the engine size increases. In the 2011 application the Corporation has proposed new engine size groupings for motorcycles and has started adjusting the engine size relativities toward the indicated rates. 4. Driver Safety Rating (DSR): 96% of motorcycle policyholders surveyed indicated that they were the only rider of the motorcycle. Also, riders with more experience had less claims than inexperienced riders. DSR will provide a more accurate assessment of driver risk and lead to lower rates for experienced motorcycle riders with clean driving records. 5. All Purpose vs. Pleasure Use: The Corporation introduced All Purpose and Pleasure use for motorcycles in the 2006 application. To-date, Pleasure Page 18

19 motorcycles have had better experience than All Purpose motorcycles, which has resulted in lower rates for Pleasure use. The Corporation will continue to analyze this recently compiled information and will determine the extent to which further changes may be required to its classification system. Page 19

20 Moped Risk Study Report AI.12.B Moped Risk Study Introduction As part of the update to the Motorcycle Risk Study, the Corporation has created a separate Moped Risk Study. In 2004 the Corporation produced a Motorcycle Risk Study as part of the 2005 Rate application. At the time of this study, there were less than 1,000 mopeds in the population. Six years later, there are over 2,300 mopeds. This study will assess the risk presented by mopeds compared to that of non-sport motorcycles and passenger vehicles. General Information 1. Over the past five years, moped claim frequency was 15% lower than the non-sport claim frequency and 48% lower than the May to September private passenger vehicle frequency. Claims per 1,000 Units Insurance Year Moped % Change Non-Sport Motorcycle % Change May-Sept Private Pass. % Change % % % % % % % % % % % % % % % % % % % % % % % % 5 Year Average *Private passenger data excludes Comprehensive claims Page 1

21 Moped Risk Study Report AI.12.B 2. Mopeds have seen significant earned unit growth over the past eight years. However, earned unit growth slowed significantly in the 2009 year. Moped Earned Units by Insurance Year Insurance Year Moped % Change % % ,047 44% ,386 32% ,808 30% ,992 10% ,297 15% ,326 1% 3 year 9% 5 year 17% All Years 22% 3. Moped claim severity was 67% lower (uncapped losses) than non-sport claim severity over the past five years. However, moped claim severity is still more than twice that of private passenger vehicles. Severity by Type of Claim Five Year Average Type of Claim Injury Physical damage Total Moped Severity $18,805 $949 $6,290 Moped Severity (Cap at $500K) $18,805 $949 $6,290 Non-Sport Motorcycle Severity $46,975 $3,926 $19,446 Non-Sport Motorcycle Severity (Capped at $500K) $38,581 $3,926 $16,420 Private Passenger Severity $9,707 $2,063 $2,841 Private Passenger Severity (Capped at $500K) $8,896 $2,063 $2,759 Page 2

22 Moped Risk Study Report AI.12.B 4. On an incurred-to-date basis, about 90% of moped losses are from injuries, which is very similar to that of motorcycles. Only 35% of private passenger vehicle losses (excluding comprehensive coverage) are for injuries. Percentage of Total Incurred to Date Losses by Type of Claim Five Year Average Type of Claim Injury Physical damage Total Moped 89.4% 10.6% 100.0% Non-Sport Motorcycle 87.1% 12.9% 100.0% Private Passenger Vehicles 34.8% 65.2% 100.0% 5. Mopeds are less likely to have a collision with injuries than non-sport motorcycles. Over the past five years, 42% of moped collisions involved injuries and 56% of non-sport motorcycle collisions involved injuries. However, mopeds are still more than three times as likely as passenger vehicles (11.3% of collisions) to be injured in a collision. Moped Claims by Type Loss Insurance Year Injury Physical damage Total Claims Percentage of Injury Claims % % % % % % % % % Total % Moped Five Year Avg. Non-Sport Motorcycle Five Year Avg. Private Pass. Five Year Avg % % 4,670 41,221 45, % Page 3

23 Moped Risk Study Report AI.12.B 6. Approximately 43% of moped collisions are single vehicle, which is very similar to the single vehicle collision rate for non-sport motorcycles of 44%. Mopeds are twice as likely as passenger vehicles (21.8%) to have a single vehicle collision. Single Vehicle Claims as a Percentage of Total Claims Private Insurance Non-Sport Passenger Year Moped Motorcycle Vehicle % 41.3% 20.0% % 44.7% 20.3% % 43.3% 22.0% % 54.9% 20.7% % 39.4% 21.6% % 42.2% 21.7% % 48.0% 21.8% % 42.5% 22.0% % 47.9% 21.6% 5 Year Average 42.8% 44.1% 21.8% Rating Territory 1. 99% of mopeds are insured in Winnipeg (territory 1) or surrounding areas (territory 2). Compared to motorcycles, mopeds are much more likely to register in Winnipeg: 65% of units for mopeds compared to 36% of units for motorcycles. Over the past five years, mopeds in Winnipeg had a claim frequency that was more than three times higher than in territory 2. This extremely large difference in relative claim frequency by territory is unique to mopeds. The results may reflect the fact that mopeds cannot travel on the highway, which limits their exposure to claims. Page 4

24 Moped Risk Study Report AI.12.B Frequency by Type of Claim & Rating Territory Five Year Average Rating Territory Injury Physical Unit Total damage Distribution % % % % % Total % 2. Over the past five years moped claim severity in territory 2 was 77% higher than in territory 1. The relative severity is very similar to that of motorcycles (77% higher in territory 2). Severity by Type of Claim & Rating Territory Five Year Average Rating Territory Injury Physical damage Total 1 17, , ,466 1,042 10, ,502 1,610 8, Total 18, ,290 Use All Purpose vs Pleasure 1. Mopeds (71%) are much more likely than motorcycles (42%) to insure under all-purpose. 2. Over the past four years, pleasure use mopeds had a claim frequency that was 17% lower than all purpose use mopeds. Frequency by Type of Claim & Use Year Injury Physical damage Total All Purpose Pleasure All Purpose Pleasure All Purpose Pleasure Total Unit Distribution 71% 29% Page 5

25 Moped Risk Study Report AI.12.B 3. Over the past four years, pleasure use mopeds have experienced a much higher average claim severity than all purpose mopeds. However, the historical data is highly variable because of the very small number of large loss injury claims. Severity by Type of Claim & Use Year Injury Physical damage Total All Purpose Pleasure All Purpose Pleasure All Purpose Pleasure 2006 $5,538 $54,100 $993 $1,249 $2,365 $26, $10,369 $3,208 $840 $1,052 $3,420 $1, $18,201 $20,756 $894 $925 $6,061 $8, $7,769 $23,628 $789 $807 $2,641 $6,241 Total $11,103 $30,596 $881 $965 $3,802 $11,113 Rate Group 1. The distribution of mopeds by rate group has gradually shifted to higher rate groups. Distribution of Moped Units by Rate Group Insurance Year Total % 6% 14% 43% 0% 100% % 5% 14% 54% 1% 100% % 6% 14% 60% 3% 100% % 6% 13% 64% 3% 100% % 6% 15% 63% 3% 100% % 7% 17% 61% 3% 100% % 9% 19% 57% 2% 100% Riding Habits 1. In terms of kilometers driven, mopeds drive much less than motorcycles or passenger vehicles. In the telephone surveys only 3% of moped policyholders reported driving more than 4,000 kilometers in the last year, while 45% of motorcycle policyholders reported driving more than 5,000 kilometers in the last year. Page 6

26 Moped Risk Study Report AI.12.B 2. Similar to motorcycles, about 20% of moped claims occur out of the riding season. Moped Claims per 1,000 Units Outside Riding Season Total Claims Claims % Out- Insurance per Claims per of- Year 1,000 1,000 Season Units Units % % % % % % % % % 3. Of moped policyholders, 36% indicated that they rode in the months of March and April and 59% indicated that the rode in the months of October and November. 4. More than 90% of moped claims occur in the territory where the moped was registered. Claim distribution by Rating Territory and Location of Claim since 2003 Claims per 1,000 Units Territory 1 Territory 2 Winnipeg Outside Winnipeg 7 31 % of Claims in Registration Territory 97.4% 91.2% Riding Habits 1. In 70% of moped claims the policyholder is the claimant, compared to 81% for motorcycles and 63% for private passenger vehicles. The fact that Page 7

27 Moped Risk Study Report AI.12.B moped drivers do not require a Class 6 license may be the reason for the difference between the moped and the motorcycle figures % of moped policyholders indicated that they were the only rider of the moped compared to 96% of policyholders for motorcycles. The difference likely reflects the less restrictive licensing requirements for mopeds. Driver Experience and Training 1. Given the significant increase in moped units over the past five years, it follows that the majority (58%) of policyholders have only ridden a moped for 1 to 3 years. How many years have you ridden a scooter or moped? Years Policyholders Claimants 1 to 3 58% 75% 4 to 10 37% 25% 10+ 5% 0% 2. 85% of moped policyholders have never taken any form of motorcycle or moped training. For claimants the figure was 93%. Large Losses 1. Since 2001, mopeds have averaged 0.2 large loss claims per 1,000 units (or about 1 large claim for every 5,000 units). The moped large loss frequency is 78% lower than for non-sport motorcycles (1.08 claims per 1,000 units), but still about four times higher than passenger vehicles (0.06 claims per 1,000). Less than 1% of moped claim counts account for over 38% of total moped losses since Page 8

28 Moped Risk Study Report AI.12.B Large Loss Claims since 2001 Insurance Year Claims Per 1,000 Units Moped Large Losses % of Total Claim Count % of Total Claims Incurred Moped % 38.1% Non-Sport Motorcycle % 53.3% Passenger Vehicles % 15.5% Wildlife Claims 1. Mopeds have an extremely low frequency of wildlife claims. To-date, wildlife claims have accounted for only 0.07% of total moped claims costs (i.e. 70 cents for every $1,000 in losses). Wildlife Claims since 2001 Insurance Year Claims Per 1,000 Units Moped Wildlife Claims % of Total Claim Count % of Total Claims Incurred Moped % 0.07% Non-Sport Motorcycle % 9.2% Passenger Vehicles (5 Yr avg) % 7.1% Conclusions Compared to motorcycles, mopeds travel at lower speeds, travel fewer kilometers, have a lower average rate group, and have very little exposure to highway driving. Based on these characteristics, mopeds would be expected to have a lower claim frequency and a lower claim severity than motorcycles. Over the last five years, moped claim frequency was 15% lower than for non-sport motorcycles and moped claim severity was 67% lower than for non-sport motorcycles. Similar to motorcycles, mopeds have only two wheels and do not offer any protection for the rider. Based on these characteristics, mopeds would be expected to have similar claims statistics to motorcycles. Approximately 90% of moped losses are Page 9

29 Moped Risk Study Report AI.12.B from injuries, 42% of moped collisions involve injuries, and 43% of moped accidents are single vehicle. All of these statistics are very similar to motorcycles. The Corporation will continue to analyze this recently compiled information and will determine the extent to which further changes may be required to its classification system. Page 10