CIC Insurance Group, the largest co-operatives insurance and pioneer in Micro-Insurance, has announced plans to underwrite Public Service Vehicles (PSV).
Group CEO, Nelson Kuria, says plans are at an advanced stage to establish a PSV insurance subsidiary, in partnership with public transport savings and credit co-operative societies (Saccos).
Mr. Kuria who spoke during the unveiling of winners of a competition targeting heavy motor commercial insurance policyholders says there is a huge potential of growth in underwriting PSVs due to recent legal and structural changes that have brought sanity to the public transport sector.
“Measures taken by the National Transport and Safety Authority (NTSA) to curb road accidents and the law capping third party insurance compensation at KES 1mn has made PSV insurance business viable and profitable,” said Mr. Kuria.
He said CIC Insurance will set up the subsidiary through a co-operative model in which PSV owners and operators will become major shareholders through their saccos.
PSV underwriting has in the past been a loss making business with more than 10 insurance companies involved in the sector collapsing due to fraud and uncontrolled claims.
Mr. Kuria, however, says partnering with the PSV co-operatives will ensure losses through fraud are controlled since operators and owners of the vehicles will have a stake in the insurance company.
During the Draw for competition dubbed “Timua Prime Mover Na CIC Motor Commercial Plus,” Zablon Mwiti of Zabroxy Enterprises Limited won the Grand Prize of a KES 6mn Prime Mover truck.
Other winners were awarded Insurance policy worth KES 1mn, a pair of tyres (KES 80,000), fuel vouchers (KES 50,000) and a driver’s gear (KES 12,000) .
CIC General Insurance Managing Director, Kenneth Kimani, said the competition is part of a continuous programme to reward loyal policyholders.
“Our company has continued to witness very impressive and sustained growth in the last ten years, we will continue to count on our business partners as we travel the journey to become the Number One Insurance company in Kenya,” said Mr. Kimani.
CIC Motor Commercial Plus policy was launched by the underwriter in 2011 to aid transporters to haul goods without worrying about the inherent risks and their financial impact.
In an industry where duplicating competitor products and rebranding has been the norm, the policy is a tailored product intended to keep businesses on track within the Common Market for Eastern and Southern Africa (COMESA) region. Unlike other products in the market, it was specifically designed for heavy commercial vehicles.
Under the cover, policyholders receive a vehicle tracking device and Occupational Personal accident cover for driver and loader up to KES 100,000 for death and permanent total disability.
“This innovative product is in response to the changing insurance needs of our customers and it is designed to lessen the burden of businesses which are faced with numerous business risks on a daily basis”, said Mr. Kimani.
Other additional benefits of the cover include repair facilitation within the COMESA region, Monthly loan repayment whilst the motor vehicle is undergoing repair, loss of income following an accident, loss of goods through theft by employees and carrier’s liability cover.
CIC customers will also benefit from terrorism and political risks cover, which is a plus especially with the rampant terror attacks.
“We want to go beyond the straight-jacket model of many insurance covers, and with this cover we give our customers cover for employees that is; Work Injury Benefit Cover (WIBA) for driver and loader as well as Employer’s liability extension.” Said Mr. Kimani.
With growth rates slowing in the core private car insurance, companies are venturing more into faster growing specialty segments for expansion, including motorcycles and Heavy Commercial Vehicles; whose domestic sales statistics also offer an insight into the potential of the smaller specialist insurance market potential.