NAIROBI, Kenya, Feb 9 – Newly revived Invesco Assurance Company has said it expects its Public Service Vehicles (PSV) underwriting business to stabilise in the next six months.
Managing Director Geoffrey Njenga told Capital Business that by June this year, they will have a clear direction of the business, which will provide the basis for introduction of other services.
“Once the company proves that indeed it can provide the services, I believe we will be able to compete with just about anybody in the general insurance sector,” said the MD.
The insurance company, which was placed under a statutory manager in 2007, began its operations late last month. It has started receiving claims which Mr Njenga said will be settled as soon as an ongoing audit process is completed.
Invesco was resurrected after most of the 5,000 Matatus Owners Association members pumped in Sh150 million through a holding firm called the Public Transport Investment Company. This saw them own an 80 percent stake in the company.
Mr Njenga said the company intended to introduce good risk management practices that will bring order back to the matatu industry and turn it into a profit making venture for the stakeholders.
“The business model that we have proposed for Invesco is the direct involvement of the owners of that asset. By allowing them to own an insurance company, you give them the profit motive and if they don’t want to see the company die, they know they have to manage the way the risk is managed,” he argued.
He regretted the matatu industry’s reputation but added that with its proper management, it could continue to make a big contribution to the transport sector and the economy as a whole.
The high cases of fraud in the overall motor insurance industry which has resulted in hefty losses for many firms have made the insurance business unsustainable.
Mr Njenga admitted that this resulted from the poor management of risk but was quick to add that by matatu owners having a stake in Invesco, these cases would be drastically reduced.
He dismissed proposals to consolidate the matatus business within the city into one operator in order to make it easier to enforce laws and standards saying this would not work without addressing the full participation of the owners.
“Consolidating madness does not mean that you have provided a solution,” he argued.
With time, Mr Njenga said they would begin to sensitise the drivers, touts and matatu owners on the part they need to play in managing the industry.
The MD, who was also the firm’s Statutory Manager, was also quick to dismiss calls by a section of Matatu lobby group to have the government probe the revival of Invesco.