Leading PSV insurance underwriter –Directline Assurance has stage for a major struggle with Matatu operators in the country, as it pushes for digitisation of operations data including passenger manifest.
The insurance company, which commands up to 65 per cent of the market share of motor commercial PSV class of insurance, wants all PSV policyholders to implement a digital passenger manifest.
In a circular dated January 24, to all intermediaries, brokers, agents and policy holders (PSV portfolio), the firm said the move is part of measures being put in place to enhance verification of claimants after the occurrence of accidents.
The company assumes third party risks for Public Service Vehicles, where motor insurance leads in the number of fraud cases alongside medical.
“This will enhance the process of injury claims management as well as adequately respond to the timelines being applied in the Small Claims Court,” the company said.
All public service vehicles to be insured by the company will be required to register with a cashless passenger manifest system, with the firm providing the technology for the consolidation of the same.
This will be put through digital fare payment.
“To this effect, from February 1, the company will only issue policies to PSV vehicles that have a registered payment method from any of the payment gateways e.g. Mpesa Till, available in the country,” it said.
Matatu Owners Association, an umbrella body of the PSV industry, has however said the shift will not work in short period given by the company, especially for short-distance routes, which form the bulk of PSV operations.
“It means well for the industry on the issue of claims but they need to come slowly, be patient, consult widely before implementing,” MOA president Albert Karakacha told the Star on the telephone.
He said there are currently no proper platforms to implement digital passenger manifests, with challenges including the pick-and-drop module of operations most matatu’s operate in.
“It is not easy to use it (digital passenger manifest). Hey need to consult stakeholders to see how to accommodate the matatu people. For long distance it can work but still there is more that needs to be done,” Karakacha said.
While cashless payments such as Mpesa and other mobile banking platforms are widely sued in the industry, operators have not developed strong manifest records, according to industry players.
Over 60,000 matatus and long-distance buses operate on a normal day across the country, each raking in an average Sh15,000.
The move by Directline Assurance comes as it leads with the highest number of claims in the general insurance business.
According to the latest data by the Insurance Regulatory Authority, the firm had outstanding claims totaling 22,436 at the beginning of quarter three of 2023, followed by Invesco Assurance with 20,100 while APA had 10,387 outstanding claims. The company also had the highest claims paid at 2,180.
Industry actionable claims in Q3 2023 for general liability were 162,829 claims amounting to Sh38.29 billion, an increase in number but decrease in amount from 158,747 claims amounting to Sh38.51 billion reported in Q2 2023.
A total of 3,044,402 claims amounting to Sh57.54 billion were reported for general non-liability claims, an increase in number from 2,848,970 but decrease in amount from Sh58.34 billion reported in Q2 2023.
Long-term actionable claims in Q3 2023 were 156,590 claims amounting to Sh33.45 billion an increase in both number and amount from 144,056 claims amounting to Sh30.18 billion reported in Q2 2023.