‘Sick man’ of insurance sector gets rare pill

By Macharia Kamau

Insurers have for a long time thought of plans to turn around motor insurance, a segment that has been regarded as the ‘sick man’ of the industry, recording losses year after year.

There has been a proposal to classify drivers according to their accident history, where ‘bad drivers’ or drivers with high instances of accidents would pay higher premiums, while drivers with a low accident rate and claims history get discounts on their premiums.

While this is yet to start being implemented, recent efforts have seen insurers take to campaigns that encourage drivers to take up better driving habits, pointing out that while accidents are costly to the industry, they are more costly to victims, especially motorists.

The move is seen as an effort to address the root cause of what has cost the industry dearly, and generally aims at reducing the amount paid out as claims by the industry as well as save lives.

African Merchant Assurance Company (AMACO) recently unveiled its own campaign on careful driving dubbed ‘Road Safety Education and Advocacy’.

The campaign follows a similar one by the insurance industry lobby group Association of Kenya Insurers (AKI).

Careful driving

Daniel Koskey, assistant general manager Amaco said the national uptake of the message of careful and courteous driving would do wonders for motorists and insurers. He said the company planned to work with other industry stakeholders on the campaign, including AKI.

"If the campaign is taken up at the national level and other insurers join in, it could have a huge impact. On one side, it can reduce road accidents by between 30 and 40 per cent, which can have an effect on the amount the industry pays out as claims," he said.

Koskey noted that of all accidents that are reported, over 80 per cent are due to human error.

"Fatigue caused by drivers doing more than the legal maximum eight hours a day, something common among long distance truck drivers," he said.

"Other factors that cause accidents are alcohol use and driving at a high speed. It has somewhat become a trend that most of the accidents are reported on Friday and Saturday nights and going by the time they are reported, it is easy to deduce the cause."

While the accidents have had a toll on insurers’ earnings, they have left indelible scars on lives of many who lose their kin as well as the victims, a number of whom are left with terminal physical injuries.

Spinal injuries

Soren Otieno, Medical Superintendent at the National Spinal Injury Hospital said more than half of the patients at the facility are road accident victims.

"Sixty five per cent of our patients are road accident victims. Others account for a smaller number like fall from height is 25 per cent and 10 per cent are victims of assault," he said.