Kenyan motorists to pay more for vehicle insurance as providers adjust rates

Insurers who have raised their prices say the business has been loss making for a while. 

The insurance regulatory authority was earlier in the year pushing for increased premium to prevent underwriters from making losses . 

The increased pricing from the 1st of January 2022 will see comprehensive cover of private motor vehicles go up almost by 50% depending on the underwriter.

Some insurance companies have already started sending notifications to customers alerting them of the changes to the pricing.

According to one customer who has a policy with Sanlam insurance, their private motor vehicle cover will jump from Ksh 47,714 in 2021 to Ksh 72,324 come the new year.

Similar to Sanlam, ICEA lion also sent alerts to customers informing them of the change with their policy for another private motor vehicle customer showing a significant change from Ksh 51,018 which they would have paid at the start of the year to Ksh 74,374 which they are expected to pay from January 1st .

Metropolitan Cannon also sent out a memo to agents and business partners outlining revised rates for policies that they would sell to customers come the new year.

The insurance companies say they have been making losses in the segment with more than Ksh 3.27 B in losses over the last 20 years through insurance fraud and price undercutting.

Association of Kenya insurers data shows that the underwriting loss in 2020 jumped from the previous year’s ksh 1.12 B

Earlier in the year the insurance regulatory authority IRA was seeking to review the current premium rates, signalling a fresh push to increase the cost of underwriting in an industry facing price undercutting and breach in capital levels.

The increased pricing from the 1st of January 2022 will see comprehensive cover of private motor vehicles go up almost by 50% depending on the underwriter. 

Some insurance companies have already started sending notifications to customers alerting them of the changes to the pricing.

According to one customer who has a policy with Sanlam insurance , their private motor vehicle cover will jump from  Ksh 47,714 in 2021 to Ksh 72,324 come the new year. 

Similar to Sanlam, ICEA lion also sent alerts to customers informing them of the change with their policy for another private motor vehicle  customer  showing a significant change from Ksh 51,018 which they would have paid at the start of the year to Ksh 74,374 which they are expected to pay from January 1st .

Metropolitan Cannon also sent out a memo to agents and business partners outlining revised rates for policies that they would sell to customers come the new year.

The insurance companies say they have been making losses in the segment with more than Ksh 3.27 B in losses over the last 20 years through insurance fraud and price undercutting.

Association of Kenya insurers data shows that the underwriting loss in 2020 jumped from the previous year’s ksh 1.12 B

Earlier in the year the insurance regulatory authority IRA was seeking to review the current premium rates, signalling a fresh push to increase the cost of underwriting in an industry facing price undercutting and breach in capital levels.