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The third party liability insurance is one of the voluntary automobile insurances, the amount paid has been nearly 40% for the past 10 years ,the indemnity mostly results from adverse selection and moral hazard. Unfortunately, improper payments made by insurance companies will erode their profit margins. After the implementation of rate liberalization in 2002, insurance companies are in concern that they should not only be competitive in the market but be profitable itself. It, hence, must take well on rate pricing and underwriting to screen customers so as to effectively control the rate of loss.
In this study, voluntary third party liability insurance, under the factors influencing the causes of payments, will be related to what key factors will cause the loss amount of insurance companies. Thus, we adopted the ordinary least squares ( OLS) and in addition the quantile regression analysis (QR) to explore the correlations among each independent variable and the amount of the insurance claims, in hopes that the payment of the claims from insurance companies could put the accuracy and the fairness into effect so that resources can not only indeed compensate the victims and their families in need, but also provide the insurance companies, reflecting the fact that the market becomes increasingly competitive, with the references to the future new product developing and market channel identifying.
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