NAIROBI, Kenya, Nov 1 – Car insurance providers are now calling on the government to step in and curb road carnage saying their business is at risk of major loss.
The Executive Director of the Association of Kenya Insurers Thomas Gichuhi said the industry paid Sh10.3 billion in accident compensation claims out of the Sh15.9 billion shillings that it got as premiums for the year 2008.
This, he said, meant that 65 percent of insurance claims were from road accidents.
"Commissions would normally take about 10 percent of the premium while expenses of management would take 30 percent so that works out to 40 percent. If you add the 65 percent that you paid out by way of claims then what you are saying is that you are paying out 105 percent of the premium that you collected. In other words you are not making any profit," he explained.
Mr Gichuhi also observed that if road accidents were reduced by 50 percent insurance claims would reduce from Sh10.3 billion to Sh5 billion thereby making the industry profitable.
"We would be talking about reducing the number of people who die on our roads from the current 3,000 to about 1,500; the injured from about 12,000 to about 6,000 and therefore bring down the claims and make the industry sustainable," he stated.
Mr Gichuhi who was speaking during the third annual AKI Road Safety Awards ceremony in Nairobi also added that the impact that road carnage has not only negatively impacted the insurance industry but also the country\’s economy.
"After visiting a local hospital we observed that more than 60 percent of the total admissions in the surgical wards were accident victims. A majority of these people could not afford to pay their hospital bills. Now who pays for those medical bills? It is the government and this money could have been used in other development activities," he said.
He also pointed out that according to the International Roads Assessment Programme, 70 percent of road accidents involved Public Service Vehicles, cyclists and pedestrians further adding that insuring boda bodas (which have increased in the country) was turning out to be a nightmare.
"They sometimes carry two or three passengers and in addition to that luggage when they should only carry one passenger. So if you have insurance for one passenger and the motorcyclist is involved in an accident, which of the two or three do you pay and which one do you leave? If we don\’t check such irregularities the insurance will be a disaster," he said.
Also present was AKI chairman Nelson Kuria who proposed public education and a concerted effort to curb road accidents and secure the insurance industry.
"As insurers we can pay for claims but never for lost lives. People are dying and we should not just take the statistics as numbers. The insurance industry cannot work alone, government cannot work alone. We must all come together and educate each other in order to reduce and stop the road accidents for the good of the country. There is no room for lone rangers," he stated.
He also commended the new police commissioner Mathew Iteere for re-enforcing regulations commonly referred to as the Michuki rules.
"He just took over office and we have already seen some changes. He is trying to bring back sanity into our roads and for that I laud him. Let us all follow suit," he said.
Roads Minister Franklin Bett pointed out that the National Road Safety Council had the requisite capacity to help reduce the rate of accidents on Kenyan roads.
"While I applaud their concerted efforts in reversing the trail of injuries, deaths and disabilities that occur as a result of road carnage, I behove every single road user to take utmost care and caution on the road," he held adding that every Kenyan had a personal responsibility for his or her actions on the road.