Matatu owners oppose insurance hike plans
The Matatu Welfare Association has raised concerns over plans to hike insurance premiums by 15 percent from December 1.
The sector’s two insurance firms, Invesco Assurance and Direct Line Assurance, announced the plans in line with its strategy to cut down on accidents.
Matatu Welfare Association Chairman Dicskon Mbugua said the move will hurt the industry forcing players to hike prices to cover the increased cost of operations.
“For a 33 seater matautu its around Sh15,000 for premiums. But with the 15 percent hike it may go up to Sh20,000 per month and that is a hefty increase on one item alone,” Mr Mbugua said.
The Matatu Owners Association (MOA), which owns Invesco Assurance, however says the move will benefit the matatu sector by ensuring Saccos adhere to strict traffic rules and avoid accidents that have seen insurance claims become expensive.
MOA Chief Executive Officer Wambugu Kanoro said well operated matatu saccos, with fewer claims, would be offered insurance discounts of up to 50 percent.
“This is meant to give the leeway or advantage to the matatu owner whereby they can earn up to 50 percent discount of the total premium they pay annually,” Mr Kanoro said.
According to MOA, this will only be applicable to matatu owners who do not make a claim within a calendar year.