The paracetamol
approach that has been used over the years in mitigating claims arising from
motor insurance from burglary, theft , Third party injuries etc. through raising of motor premiums rates
by the Insurance Regulatory authority to
cushion the industry players against high and mostly fraudulent losses arising from motor insurance
as evidenced in the AKI statistics
reports on motor class insurance losses calls
for a long lasting solution to address the
rather comestic panacea adopted by the authorities.
The biggest problem has been partly caused by
the inability amongst the industry players to share and adopt a centralized
database on vehicle particulars which
problem can be attributed to competition for clients even against the cash and
carry rules and the fact that many underwriters in the industry preference to
leverage losses on motor insurance especially if they have other huge schemes
from the same client that are not loss
making which in my opinion is an affront to
risk based management in the long term .
A long
lasting solution in mitigating claims
arising from motor insurance does not lie in raising premiums rates but
modernising our infrastructure in the manner that use of automated highways
will greatly reduce risks of accidents caused by overspeeding , a simple case
in mind is use of agencies like KAPS
to manage major highways by issuing cards on entering any highway and on exit
- payment for time of use and attach penalties for arriving the required
destination before the stipulated time
through electronic monitoring , this can
greatly reduce the appetite for commercial vehicles e.g bus companies rushing
to rake profits by over speeding instead of issuing night travel bans – install
some sort of KAPS managed tolls along major roads with a defined set
parameters on the do’s and dont's while driving on highway.
Lastly and most
importantly there is need for Treasury secretary
to look into ways of either zero rating and or making importation of Car tracking
devices duty free , this will go a long way in addressing theft claims cases
and even fraudulent claims, make it mandatory for all vehicles seeking
insurance be fitted with such devices . The current practice in the market is
that most underwriters have been forced to develop above premium rates motor
products to cushion them against motor losses hence a drain on policy holders ,
there is an urgent need for financial inclusion from both the sectoral players
and the concerned government authorities to embrace Telematics Insurance at all
costs but these calls for greater investments infrastructure and strengthens our institutions morally.
