The MTPL topic is becoming more and more popular. In most countries automobile insurance is unprofitable business and it serves to attract clients for voluntary insurance. Nowhere this brings in return. All over the world the level of profitability is no more than 2-3 per cent. Compulsory automobile insurance seems to be a kind of social insurance for insurance companies. Foreign experience of introducing MTPL demonstrates that unprofitability of this business appears to a full extent in a couple of years. However, practice shows that not all countries, this type of insurance is bound to damage and reduced tariff rates do not cause losses, it follows from the example of Israel and Japan.

The MTPL system is applied in many countries but there are some features in Russia. Insurance terms and conditions are settled by state and insurance tariffs are also controlled by state. The tariffs were scheduled on 7 May 2003 according to Government Regulation of Russian Federation № 264 and have been changed yearly. To the current moment Federal insurance oversight service accounts demonstrate that loss ratio is close to maximum permissible value in more than 50 regions, it exceeds 77%. But this index in most large insurance companies runs up to 30% [3].

Actuarial problem was urgent during all history of insurance development because the company’s future and the customer’s will to buy insurance service depend on the tariff rate. It requires efficiency and the right choose of design procedure.

In 1993 Russian Insurance Supervision Service precept the Arrangement №02-03-36 establishing two techniques of tariff calculations for risky types of insurance. The choice depends on the present data and observance of rules.

According to calculations conducted as provided by federal methods, many experts and insurance companies’ representatives ground the suggestion of increasing MTPL tariffs.

Using the second technique which allows to work out the tariff rate relying on total receipt of insurance money on account and insurance payments a research for 40 Russian insurance companies was conducted. We explore the level of their MTPL unprofitability for the period from 2004 to 2009 and its correspondence to the tariff rate.

This very method is based on using the linear trend model so that actual data for loss ratio of sum insured are leveled with the help of linear equation. But this does not take into account the random deviate so we need regression method for more accurate calculations. The loss ratio as the method was updated was approximated by different functions such as linear, exponential, logarithmic, power functions and square, fourth and sixth polynomial functions.

In terms of approximation minimum error and maximum coefficient of determination the sixth power polynomial was chosen as the best variant.

The results of the research are pictured below.

Pic. 1. Predicted gross premium value and its actual mean value