Corruption blamed for the decay

By JOHN OYWA

Insurance industry stakeholders say corruption by police and indiscipline by road users was costing the industry massive loses.

They claim overloading by Public Service Vehicles and illegal use of private cars in public transport had also contributed to rising cost to insurance firms.

The insurance industry paid claims amounting to Sh10 billion in 2009 and the amount is likely to rise this year.

"Police allow un-roadworthy vehicles on the road. The PSVs carry more than their insured capacity. The tricky part is that the Insurance Act requires underwriters to settle claims even for excess passengers so long as they were in an insured vehicle," says Mr Kennedy Abincha, the Chief Executive Officer at Amaco Insurance Company.

Mr Abincha says it is wrong for the police to allow saloon cars, especially the Toyota Probox and G-Touring models, to operate as PSVs.

"The Probox is everywhere and it has been turned into a matatu. It carries excess passengers with some crammed in the boot. Whenever they are involved in accidents which is very often, insurance companies are forced to pay claims yet these vehicles are not supposed to operate as matatus," laments Abincha.

Police involvement

He says most of the Public Service Vehicles involved in fatal road accidents were either defective or overloaded.

"The Police headquarters should actually investigate claims that some of the matatus flouting traffic rules are owned by police officers," said Abincha.

Insurance industry players have also raised a red flag over fake insurance stickers being manufactured at Nairobi’s River Road.

These fake stickers are being sold to unsuspecting motorists who only discover they had been conned whenever they were involved in accidents.

The fake stickers, sources said, resemble the ones issued by leading underwriters and could pass as genuine unless keenly scrutinised.

Last month, a matatu operator in Webuye who had been conned into buying the fake stickers got a shock of his life when he went to file claims after an accident only to be disowned by an insurance firm he believed had insured him.

Mr Abincha is advising PSV and private car owners to only deal with registered insurance companies.