Association of Kenya Insurers Signs Agreement

The Association of Kenya Insurers  (AKI)  has  today signed  an agreement  with  providers of  insurance  auxiliary services, bringing  into  full practice new Standards & Benchmarks for commercial and private motor claims.

The signing ceremony between AKI  and  Kenya Automotive   Repairers Association (KARA), the Automobile Engineers & Assessors Association (AEAA) and the National  Association  of  Kenya  Investigators  (NAKI),  was  held  at  the association’s head offices at Victoria House in the Upper Hill area in Nairobi.

The standards and benchmarks are meant to contribute to significant drop in losses incurred by insurance companies due to manipulations on quotations for repairs, assessments and investigation by the providers of such services.

AKI said the initiative is part of a bigger plan to develop a common catalogue of products and services so as to ensure that all insurers are well informed to avoid rip-offs by the shrewd traders.

The benchmark will act as a source of knowledge to AKI members on costs of varied products and services ranging from fees, spare parts, painting charges, labor, re-inspection and investigation reports among other services.

Through the general insurance council, AKI has been working to reduce the huge losses its members incurred due to high claims filed by its services providers.

Between 2004 and 2007, for instance, claims accruing from commercial and private motor insurance covers averaged a ratio of 63 percent. In 2005combined ratio was 75%.

AKI Chairman, Mr. Nelson Kuria said the standards and benchmarks which have been developed since 2006 will be critical in eliminating fictitious claims filed by service providers.

They would also help to eliminate service providers with vested interests who manipulate claims at the expense of insurance companies.  Essentially, the new  standards  &  benchmarks  will  encourage  more  service  providers  to  join professional associations as a vital incentive for attracting business from the insurers.

This will facilitate an increment in membership among the   motor claims stakeholders as service providers jostle for a position in the organized groups of repairers, inspectors and assessors.

Some of the benefits accruing to motorists/insured include the following:

• Timelines for assessment, investigations and repairs;
• Body shops labour rates will be specified;
• Painting charges are defined;
• Clear mark-ups for body parts/spares;
• Standard price catalogue for common body/spare parts;
• Assessment charges for pre-insurance qare structured;
• Fee structure for investigations, tracing charges and court attendance;
• All the associations have code of practice- therefore complaint can be lodged.

Ultimately all stakeholders in the motor insurance industry will mutually benefit, but the main beneficiary is the insured/consumer.