An Empirical Evaluation of the Implementation of the Bonus-Malus System in the Tunisian Automobile Insurance Ratemaking

The objective of this study was to empirically assess the impact of the introduction of the Bonus-Malus system on road security in the pricing of car insurance in Tunisia.  Results indicate that when we consider the risks altogether, the effect of the reform is not very significant. This is explained by the fact that bad risks, which represent 92.44 percent of the sample, get round the law to change the company. Therefore, the bonus-malus system was not very efficient in reducing the probability of accidents. This shows the need for indicative variables of inflows and outflows in a pricing system where there is no central risk and where individuals can easily change the company and increase their benefits, since they can be placed in a Bonus-Malus category that is less than the one where they were. One of the important conclusions has been that besides the power of the vehicle, three other variables can explain the number of accidents: the brand and the age of the vehicle, the place of residence of the insured and the guarantees to which they are subscribed.