1.

INTRODUCTION TO THE SURVEY

1.1 BACKGROUND OF THE STUDY
(The whole study is based on an assumed Insurance company called Quick insurance,
which is successfully operating in Sri Lanka over 5 years.Amount has indicating in
dollars as to referred by the mother company in USA)
Insurance is a highly competitive industry in Sri Lanka. As the important and significant
player in the industry Quick assurance Plc has decided to revise it current standards and
polices towards the drivers who are involved in an accidents and are arrested for drunk
driving. Though, currently it is providing both the general and life insurances for every
market segment, as the fastest growing sector in the industry, they have decided to put the
more weightage on this field.
Quick PLCs business portfolio is also consists of 35% of motor businesses. In 2007 the
company had a growth above 32% in motor sector. Retail distribution channel in particular
recorded a very satisfactory increase in premiums. The companys main focus area was in
last 2 years is to grow the business especially in motor at a rate of above the industry growth.
In order to achieve such a target the company top management has taken this above
mentioned important decision.
Company have to specially look for what factors been mostly influencing in accidents. And
revise the policies accordingly. For this purpose we have decided to get recently collected
data collection regarding the motor accidents from State Department of Transportation to
provide it with the records of all such motor vehicle accidents investigated by the police.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

1.2 RESEARCH PROBLEM

As a rapid growing motor insurance company, the Quick Insurance Plc wants to find out
how it should be cable enough to provide the insurance policies according to the current road
accidents.
We have collected state Department of Transportation provided information about the driver
of the car and the locality of the accident and some other relevant information recorded data
sheet. So throughout this research report, it is trying to analyze and obtain the affected factors
for accidents, nature of the relationships between various affecting factors and towards
identified important things where we should revise our existing policies and establish new
policies etc
In order too come up with a better solution we are intended to choose some variables as
describe in the Collection of Data heading.

1.3 OBJECTIVES OF THE SURVEY

The automotive insurance sector plays a prominent role in most of the insurance companies
and such that we also interested in finding out more affecting factors in accident. This survey
provides information on the accidents and arrested for drunk driving. This information serves
as a very important indicator of revising the Quick insurance companys policies towards
such drivers and type of accidents. The Quick insurance company, business community uses
this information to analyze market performance and developments.

1.4 RESEARCH METHODOLOGY

Methodology is based on survey type research using a primary collection of data. The
methodology proposed by survey team to perform the understanding of current road
accidents and type of drivers who are involved in an accident and are arrested for drunk
driving. This has not been studied earlier by the Insurance Company. Therefore no past
studies have been carried out in similar grounds to identify the type or root cause of the
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

accident towards the perception of vehicle insurance policies. Therefore, quantitative data
supported by qualitative findings is decided as the appropriate research methodology.

1.5 COLLECTION OF DATA

As per company requested, the State Department of Transportation has provided recently
collected records of all such motor vehicle accidents as investigated by the police. The
department has maintained separate file for all such accidents in which a drunken driver is
involved. We could collect data regarding each such 75 accidents regarding following
information.

Sex of the driver

Age group of the driver

Civil Status

Whether employed.

Number of arrests for drunk driving

Type of Car

Cost of repairs

Extend of third party insurance coverage

Location of accident

Fine amount imposed by the judge.

1.5.1 QUALITY ASSURANCE

Mainly, all data has collected from the State Department of Transportation. So as a
responsible government institution which provides important information even to overseas
requirements representing country, we have kept a trust on provided data.
The confidentiality of collected information will be guaranteed in each and every step of the
study to get accurate information, as well as to keep each ones privacy.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

1.5.2 TOOLS USED FOR DATA ANALYSIS

For data analysis purpose it has used the SPSS and Excel software analytical packages. To
capture raw data a data entry module will be developed and data analysis is done based on
the variables suggested as sample selection.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

2. DATA PRESENTATION
2.1 ANALYSIS BASED ON GENDER

Figure 2.1 : Participation for the survey Male: Female

It is concluded that most of the male drivers are probable in meet with an accident.
2.2 ANALYSIS BASED ON AGE GROUP

Figure 2.2 : Age Group of the participants.

It is observed that most of the adult people are meet with accidents.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

2.3 NUMBER OF ARRESTS FOR DRUNK DRIVING PRIOR TO CURRENT BASED ON AGE
GROUP

Figure 2.3 : Number of arrests for drunk driving

According to the above analysis of number of times that the people have met with according
to there age groups, it is clearly observed that teenage people are comparatively less in
probability of meet with accidents. Most of the teenage people among participants have never
ever met with an accident. It is a really good sign of future. We should take into account this
important factor in revising our existing insurance policies. Some senior citizens have met
with accident even for the 5th time. But as a conclusion, it is clearly showing that Adult
people are high in meet with accidents.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

2.4 ANALYSIS OF PEOPLE WHO MET WITH ACCIDENTS BASED ON WHETHER THEY
EMPLOYED.

Figure 2.4 : Participants analysis based on Whether Employed

Employed people are more probable in meeting with accidents.

2.5 VALUE OF THIRD PARTY INSURANCE COVERAGE BASED ON WHETHER EMPLOYED.

Figure 2.5 The value of third party insurance of the participants based on whether they employed

A = Extend of third party insurance coverage in thousands of dollars

Regardless of Employed or Unemployed, most of the people are tend to get the third party
insurance coverage which is in the range of $ 70 or more than that, but less than $90. Most of
the Employed people are having the $90 or more than that amount of third party insurance
cover.
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

2.6 ANALYSIS OF ACCIDENT BASED ON THE TYPE OF CAR

Figure 2.6 : Participants type of the car

Most of the Mid Type cars are probable in meeting with accidents. Compact and Luxury
cars are quite similar in vulnerable to accidents. Any way these two types of cars are showing
a fairly less figure for accidents which have taken place comparatively Mid Size motor
vehicles.
2.7 ANALYSIS OF COST INCURRED FOR REPAIR BASED ON TYPE OF THE CAR.

Figure 2.7 Cost incurred in repairing based on the type of the car

A = Cost of Repairs in thousands of dollars

It is clearly observered that Mid Type cars have incurred a large sum of money in repairing.
Compact cars are always bear a less amount as repair cost. Only Luxury cars incur $1000
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

or more than that. But for Luxury cars repair amount is in the range of $800 and $1000 in
most of the cases.

2.8 ANALYSIS OF ACCIDENT PLACE AND TYPE OF CAR.

Figure 2.8 : Type of the car which met in the accidents based on the Location

Regardless of the type of the car, every car has met with the accident in High ways in most of
the cases. Compact and Luxury cars are somewhat similar in location of the accident which
has taken place, whereas Mid Size cars have met with the accident in Highways in most of
the cases.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

3. STATISTICAL ANALYSIS.
3.1 USING FREQUENCY DISTRIBUTION.
3.1.1 ANALYZING REPAIR AMOUNT

It

is

observed
that in most
of the case
people have
to incur the
repair cost in the range of $700 - $800 or $800 - $900. As an average it is $662.8. This
distribution is said to be positively skewed. That it is indicated that the mass of the

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

10

distribution is concentrated on the left of the figure. In most of the cases people have to incur
$800 as the repair amount.
3.1.2 FINE IMPOSED BY THE JUDGE.

It is observed that in most of the cases judge has imposed the fine amount as in the range of
$200 - $300. As an average it is $523.60. This distribution is said to be positively skewed.
That it indicates that the mass of the distribution is concentrated on the left of the figure.
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

11

Most importantly we can see that in most of the cases judge has imposed $300 as the fine
amount.
3.1.3 EXTEND OF THIRD PARTY INSURANCE COVERAGE

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

12

It is observed that in most of the cases people have to incur $80 as the repair amount. As an
average it is $74.47. This distribution is said to be negatively skewed. That it indicates that
the mass of the distribution is concentrated on the right of the figure.

3.2 USING CORRELATION COEFFICIENT.

We are indented to find whether it ha a significant relationship between selected factors and
the nature of the relationship.
3.2.1 SEX AND THE NUMBER OF ARRESTS FOR DRUNK DRIVING.

As a norm it is accepted that lady drivers are more careful in driving. But according to
observed data sample it shows that there is no any significance relationship between the sex
of the driver or number of times prior to current one that they have been arrested for drunk
driving. The level of significant is greater than the 0.05.
3.2.2 TYPE OF THE CAR AND THE LOCATION WHICH TOOK PLACE THE ACCIDENT

It cannot be observe that there is a significant relationship between the Type of the car and
place which taken place the accident. Level of significant is greater than 0.05, Further; we
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

13

can assume that accidents can be happen at Highway or on City roads regardless of the type
of car.

3.2.3 TYPE OF THE CAR AND COST OF REPAIRS BEEN INCURRED.

It is observed that, there is a very Strong relationship between the Type of car and the Cost
being incurred to repair the car. Even when we present in the bar charts, we was clearly
showed that Compact type cars (which are larger than a supermini and smaller than a large
family car.) have taken a small amount in repairing which compared to Luxury cars. That is
as the value of the car increase, the repair amount also get increase.
3.2.4 WHETHER EMPLOYED AND EXTEND OF THIRD PARTY INSURANCE

It is observed that, there is a significant relationship between the Employed or not factor and
Extend of which they have taken third party insurance coverage. Somehow it is clearly
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

14

showing that there is a small negative relationship. That is we can assume like, when the
Unemployment rate go high, people are tend to bought cheap insurance overages.

3.2.5 NUMBER OF ARRESTS FOR DRUNK DRIVING PRIOR TO CURRENT AND FINE IMPOSED.

It is clearly observed that there is a significant relationship exists between the above two
factors. That is there is a Very Strong Positive relationship between the number of times
being arrested prior to the current one for drunk driving and the Amount of fine imposed by
the judge. So we can conclude, as the number of time being arrested for drunk driving
increases, the fine imposed by the judge also gradually being increased.
3.2.6 AGE AND NUMBER ARRESTS FOR DRUNK DRIVING PRIOR TO CURRENT.

Here also there is a significant relationship exists between the two factors. It is observed that
Age group of the driver and the Number of times arrested for drunk driving is positively
correlated and it a small relationship. However we can assume that at least by small number
when the age group goes high, the number of times being arrested for drunk driving also gets
Created by: H.A.A.R. Hettiarachchi
5266FM2010037

15

increases. Even from the bar char that have drawn in a previous page this situation going to
be proved.

3.3 USING REGRESSION ANALYSIS.

As it has find out there is a relationship between some variables, this session is mainly
concentrates on establishing equations between those related variables. The goal of
regression analysis is to obtain estimates how a change in one of the independent variables
affects the values taken by the dependent variable

3.3.1 TYPE OF THE CAR AND COST OF REPAIRS BEEN INCURRED.

It can be obtain the following equation for the relationship exists these two variables using
the following equation.
Cost of Repairs = 0.71 + 1.13 * Type of Car

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

16

3.3.2 NUMBER OF ARRESTS PRIOR TO CURRENT FOR DRUNK DRIVING AND AMOUNT OF
FINE IMPOSED

It can be obtain the following equation for the relationship exists these two variables using
the following equation.
Judge Imposed Amount = 291.51 + 200.08 * Number of times arrested prior to current
one

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

17

3.3.3 THIRD PARTY INSURANCE COVERAGE AND THE FINE AMOUNT IMPOSED.

It can be obtain the following equation for the relationship exists these two variables using
the following equation.

Judge Imposed Amount = -73.56 + 8.02 * Third party insurance coverage

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

18

4. LIMITATIONS OF THE STUDY

The analysis is totally depend on the Primary data which was provided by another
institution.

We have considered only very limited factors of which may cause to accidents. So
really picture of the drivers who are involved in an accident cannot be generated.

Competitor strengths have not been studied in revising the policies.

Due to time limitations no further analysis was done.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

19

5. RECOMMENDATIONS

Company should revise the existing insurance policy for Mid Type Cars as they are
more probable in meeting with accidents.

For Luxury Cars we have to allocate a high amount as repair cost in the particular
insurance package. And company should increase the premium amount of such cars.

When it is analyze the accidents based on gender we could see that males are more
probable in meeting with accidents, and Employed people are more probable in
meeting with accidents. so that it is advisable to create some insurance packages like.
Males Employed
Males Unemployed
Female Employed
Female Unemployed

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

20

Then we can price these packages according to the severity.

As Employed people are tend to buy high value insurance packages, we should
increase our marketing campaign more towards them and should increase there
interest on buying our third party insurance cover.

As the age limit increase, we observed that number of times that they have arrested
also getting increase, so we should try our best to keep existing teenage people and
attract more teenagers into our company.

It is advisable to revise insurance policies of particularly Adult and Senior citizen for
there performance over the years. If they are loss making customers take necessary
actions.

It will be a much advantage in charging a less amount of insurance premium from

teenage people than adults or seniors as they less in meeting with accidents. Some
how before implementing this, should consider the past performance of particular
person. This policy be valid for every one regardless of their age, but depend on the
past performance and better relationship with the company.

Develop a new policy for vehicles, based on their daily root. That is whether it is
travel in highways in most of the cases or in City roads. Since it is observed that most
of the vehicles travel in Highways is more probable in meeting with accidents and
City is not. We can design a special insurance policy by considering this factor.

As the number of arrests go up, the fine amount also goes to a high figure so as the
number of arrests increase we should revise our existing policy as to increase the
amount of which paid by the customer as insurance premium to the company.

As Most of the people tend to get $80 of third insurance coverage, we should newly
create a new package with attractive benefits by mainly considering this factor.

Again a new policy should be created as if a person increase more than 5 accidents
per year, his premium amount also get increase by 5 times.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

21

6. CONCLUSION
As the Quick Insurance Plc wants to revise its insurance policies towards drivers who are
involved in an accidents and are arrested for drunk driving, so the whole motive behind the
this research is to find out the reasons for this factor.
We have carried out this study by using the primary data records provided by the State
Department of Transportation.
The major difficulty I have faced when carrying out the survey was the time limitation
restricted us from doing further analysis and the limited number of factors provided and
small space.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

22

However, I am in confident that I was able to successfully identify places where company
should revise and introduce insurance policies towards the drivers who involved in an
accident and are arrested for drunk driving.

Created by: H.A.A.R. Hettiarachchi

5266FM2010037

23