, NAIROBI, Kenya, Jan 8 – Insurance companies will pay over Sh500 million in compensation claims for fatal accidents that occurred in December alone.
This is according to Bima Intermediaries Association of Kenya Chairman Washington Ndegea, who says the rate of compensation for an insurance fatality due to motor accidents stands at Sh3 million.
He says the accidents in December that saw over 200 people dead took away 0.5 per cent of the expected premium income of the year 2017 from only one class of insurance businesses.
“This is costly in whichever way one was to look at it. It is costly to the families that were left especially if they lost breadwinners. It is costly to the nation for losing souls that were productive or were promising and the fact that replacing them will be a costly affair. It is costly to the insurance sector that has to cough out compensation to the affected families,” he stressed.
He urged insurance industry players to be at the forefront of any attempt by the government in mitigating road carnage.
“We have over 10 classes of insurance business in this country. Most of the fatalities were from Public Service Vehicles, a fact not lost on the insurance fraternity. This brings us to the question above of whether the insurance industry is taking the issue of road accidents serious enough to do something about it,” he said.
He said the digital driving licenses are especially progressive.
“This is good for insurance companies who can adopt the same and work together with NTSA in accessing a driver’s record so that it can be pegged on the premiums that an individual will have to pay. But for it to be practical, a law will have to be passed to allow insurance coverage to be issued to drivers and not to vehicles as is currently the norm,” he noted.
In the first half of 2017, the loss ratio under general insurance was 63.5 per cent while same period 2017 was at 62.3 per cent.
Claims incurred by general insurers were Sh45.07 billion in the period under review an increase of 4.5 per cent compared to Sh43.15 billion incurred during the previous year.