Efforts related to the complete reform of the Motor Liability Insurance Act were continued in close collaboration with the Federation of Finnish Financial Services and by contributing to the work carried out by the Ministry of Social Affairs and Health. The new rules of the Finnish Motor Insurers' Centre were adopted.
Insurance premium income (adjusted for credit losses from insurance premium receivables and excluding pay-as-you-go system premiums) totalled EUR 829 (846) million. Insurance premium income decreased by 2.1% year-on-year. Based on motor liability insurance, 127,678 (129,406) traffic accidents were reported to insurance companies, a reduction of 1.3% compared to the previous year.
Legal and insurance operations
LVK was closely involved in the reform of the Motor Liability Insurance Act. Following the adoption of the act, the Finnish Motor Insurers' Centre updated the instructions and regulatory guidelines it maintains to reflect the amended act and opened an information service on the content of the act targeted at consumers on its website. Our experts provided training on the new Motor Liability Insurance Act at a number of events in the motor liability insurance sector.
The Centre took part in the Transport Code monitoring group operating under the Ministry of Transport and Communications. In autumn, the Act on the investigation of road and cross-country traffic accidents was updated in collaboration with the Ministry of Transport and Communications. Preparations for the EU data protection regulation that enters into force in 2018 were commenced.
A total of 763 (870) frontier insurance policies were sold, which is considerably less than the year before. The number of LVK-issued transfer insurance policies sold totalled 55,357 (59,111). All in all, 97,105 (98,679) transfer permits were issued.
A new claims representative register was deployed, as well as a service set up on LVK's website from which private persons may retrieve a certificate of their insurance and claims history.
The number of reports of uninsured vehicles coming from the Finnish Traffic Safety Agency Trafi was 43,531 (43,429). The debt collection system was so developed as to allow collaboration with the State Treasury. No changes took place in the numbers of debt restructurings, compulsory auctions and enforcements. The number of rejoinders filed with the Administrative Court increased to 74 (35) cases. The Supreme Administrative Court processed 5 (6) cases.
A total of 5,566 (6,449) new damage and report cases were reported to LVK. Cases where damage was caused by Finnish vehicles numbered 1,185 (1,095), of which 400 (409) were cases of personal injury caused by unknown vehicles, 717 (621) caused by uninsured vehicles, and 68 (65) damage under transfer insurance.
There were 588 (657) cases of damage caused by foreign vehicles reported and 3,410 (4,291) cases of reindeer damage. Additionally, in relation to the full cost liability of medical care, public healthcare providers sent 202 (215) cases involving patients hurt in traffic accidents for whom the insurance company liable to compensate could not be determined at the time of treatment to LVK for investigation.
As the claims representative of foreign insurance companies, LVK handled 150 (158) cases of damage. As the compensation body under the Motor Insurance Directive, LVK handled 31 (33) cases.
The reindeer damage compensation system (the 'ePoro' application) was revamped in its entirety and deployed.
The Motor Liability Insurance risk study as well as company-specific studies, breakdowns of accidents by main vehicle groups and the Home Municipality and Brand study for 2016 were carried out. Additionally, a separate risk study concerning motorcycles was also made.
The calculations required for the pay-as-you-go system were prepared, based on which the final adjustment for 2015 and the advance adjustment for 2016 were made and the pay-as-you-go payment for 2017 was determined.
The average insurance premiums for 2017 on which the penalty premium charged to owners of uninsured motor vehicles are based were determined. Mortality data for the motor liability insurance and workers' compensation and occupational disease insurance mortality reference model was set up.
Cash flow forecasts for technical provisions estimated by LVK required by Solvency II reporting, as well as corresponding cash flow forecasts concerning motor insurance major damage pools, were sent to the member companies.
Road safety work and accident investigation
A new strategy for traffic safety work was prepared based on the strategy of the Finnish Motor Insurers' Centre. Traffic safety operations were re-branded. The Finnish Crash Data Institute (OTI) commenced operations under its new name in September.
Provisions were made in view of the changes to the financing of traffic safety effective as of the beginning of 2017. The Act on the investigation of road and cross-country traffic accidents (24/2001) was repealed and replaced by a new act as of the beginning of 2017.
A total of 193 road accidents that led to the death of a person travelling in a motor vehicle were investigated, as well as 47 accidents resulting in a death of a pedestrian or cyclist and 130 accidents that were included in special projects, totalling 371 accidents. A three-year research project on data collection concerning serious injuries was commenced.
Investigation team material and compensated road accident statistics were used not only for preparing in-house statistical reports, but also for road safety research and investigations, for substantiating statements and presentations, and in communications concerning road safety, among other things.
The Centre participated in the operations of the ETSC, the Nordic Road Association and Nordic accident investigation organisations.
The number of inspection requests received by LVK during the year was 824 (992).
The update of painting time recommendations between vehicle and insurance sectors was continued by conducting the Cab Group AB's painting time survey agreed upon between the sectors.
The practice of forwarding risk classification data to member companies that was introduced in support of vehicle and motor liability insurance operations was continued, and the provision of monthly repair cost statistics was commenced.
Communications and stakeholder activities
As far as communications are concerned, the most important sets of issues in 2016 were the new Motor Liability Insurance Act and the branding of traffic safety work. Press releases, blog posts and online news were prepared and press conferences were arranged on topical issues. The Centre participated in public debate in social media, by publishing opinion pieces and by giving interviews.
Communications continued their traffic safety-related collaboration with other operators in the sector under the '#rohkee' ("#brave") campaign to combat drunk driving and in the Communications Advisory Committee of the Central Organisation for Traffic Safety in Finland (Liikenneturva).
Communications made investments in the Centre's own digital communication channels. LVK set up its own blog and an electronic newsletter named 'Uutisväylä'. The crisis communications plan was tested by means of an exercise. Media training sessions were continued on a regular basis, as part of standard operations. Cooperation with insurance companies was intensified by starting the Communication Division of the Insurance Centre.
LVK paid a total of EUR 8.1 (8.7) million in actual compensation during the financial year, and remuneration liability amounted to EUR 55.1 (41.3) at the end of the financial year. Approximately EUR 4.9 (5.6) million of actual compensation was paid for road accidents caused by foreign vehicles. The amount of forwarded payments totalled EUR 9.6 (9.8) million, of which EUR 6.9 (6.7) million was rendered to the Central Organisation for Traffic Safety in Finland. The Insurance Rehabilitation Association of Finland (VKK) was rendered EUR 1.1 (1.3) million and the Traffic Accident Board EUR 1.7 (1.8) million. LVK's own operating expenses (claim handling and administrative expenses excluding depreciation and finance expenses) totalled EUR 6.4 (6.4) million.
LVK received a total of EUR 3.9 (3.6) million of income from collecting penalty premiums, transfer insurance policies, surplus of Nordic frontier insurance pools, processing fees and other items
A total of 51 person-years were used in LVK's operations. In addition to its own staff, LVK also had joint staff shared with other organisations within the Insurance Centre.
The personnel strategy was revised. Its basic structure will remain in force until 2020, with special priority areas selected on an annual basis. The implementation of the strategy is monitored by means of an annual report and a more detailed personnel report. Additionally, the development of the remuneration system was commenced in collaboration with the Finnish Workers' Compensation Centre.
Assessment of likely future development
No phenomena with immediate effect on future development can be seen in the operating environment in the short term after the end of the financial year. However, the new Motor Liability Insurance Act, the overhauled Road Traffic Act, the Transport Code regulation package and, above all, the accelerating technological development and digitalisation of our society, among other things, will have a considerable impact on the motor liability insurance sector and road accident risks in the future.
Bodies of the Motor Insurers' Centre in 2016
Executive management of LVK in the Insurance Centre Group
Oy Tuokko Ltd
Jari Miikkulainen, APA, served as the controlling auditor.
The official annual accounts are available for viewing at the LVK office, Itämerenkatu 11–13, Helsinki.