Tough times are on the horizon for motor vehicle owners in Kenya as underwriters adjust the rates for comprehensive insurance upwards. The premiums rates applicable have been varying from one insurance provider to the next with customers shopping for those with the best rates .  This is no longer the case as the insurance industry seems to have come to an agreement to raise the insurance premium rates by 50%.

The sharp increase in insurance premiums has been attributed to the challenging economic environment posed by the COVID-19 pandemic. Whereby a majority of insurance companies reported losses with only a few announcing profits such as  Jubilee, CIC Insurance, Britam and UAP Group.

However, the move to adjust premiums has been met with opposition by motorists who term it as being excessive. As a reponse to this, the Kenya Human Rights Commission (KHRC) took the matter to the High Court late last year. The High Court, however, declined to suspend the planned increase of premiums for motor vehicle insurance by up to 50%, with Justice Anthony Mrima instead certifying the case filed by the Kenya Human Rights Commission (KHRC) as urgent and directed parties to appear for directions next week.

KHRC argued that the planned increase of premiums is illegal because there was no public participation. The Commission further accused the Insurance Regulatory Authority (IRA) of failing to protect the public and policy holders from such increases. The commission is therefore seeking a declaration that the increase of premiums without public participation is illegal, null and void.

According to IRA, the general insurance business remained the largest contributor to industry insurance premium contributing 59.3% of the total premium. Over the 2 years pandemic period, there has been an increase in the number of claims according to the industry regulator, with insurers receiving over 2.1 million claims in the second quarter of 2021, a 19% increase compared to the first quarter of the year.

For the motorists, part of the changes will be to deepen the use of customer-oriented premium rating. This means that the risk profile of each customer will be heavily relied on in picking the monthly premiums. If implemented, Kenyans will have to dig deeper into their pockets to cover the adjusted premiums.