Matatus are the most common means of public transport in Kenya accounting for over 70% of travel in urban areas like Nairobi, Mombasa, Kisumu and others. Matatus ply different routes within the city and some of the popular suburbs outside the city centre to major towns and centres. The Matatu transport industry forms one of the largest percentage of the informal sector employing thousands of youths. In efforts to make the Matatus industry digital and cashless, many leading banks in Kenya and global tech giant Google have nonetheless failed to move the industry online. Popular among these is the long failed project BebaPay created by Google that failed to take off.
The typical Matatu carries about 14 to 28 passengers plying some popular routes like Rongai, Eastleigh, Embakasi and more in Nairobi. These PSV vehicles are custom fitted with different types of seats, music systems as well as LCD screens for passenger entertainment. Like all motor vehicles on Kenyan roads, Matatu require car insurance cover to operate on the road.
The rate of accidents on PSV vehicles is very high and especially the Matatu group. This has caused many of the insurance companies shy away from insuring vehicles that are operating as Matatus. In the market today, only two companies offer Matatu insurance namely Invesco and Directline insurance companies. The biggest insurance liability is the third party bodily injuries and deaths arising out of accidents as well as the passenger legal liability. This segment is reported together with the commercial motor insurance segment is the AKI Annual industry report with the 2 leading providers of this class of business recording premiums of KSh 5.1 billions, an equivalent of USD 51 millions.
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Directline Assurance Company is the undisputed leader in PSV Matatus and Bus insurance in Kenya. It has sorely concentrated on the motor insurance business segment of the market. It offers the following products exclusively PSV Matatu, PSV Bus, Taxi, Commercial Motor, Private Motor. With over 17 branches country wide, Directline has an annual turnover of over KSh 3.2 billions putting it among the top 5 car insurance companies on the market. For a list of the top car insurance companies in Kenya. The company is headquartered at Hazina Towers, 17th Floor, Monrovia Street, Nairobi and has branches in major cities like Kisumu, Eldoret, Embu, Machakos and others. On the motor commercial business line, the company made an underwriting profit of KSh 82 millions bucking the trend experience by most of the industry.
Invesco Assurance is perhaps the leading PSV Matatu insurer in Kenya with branches in over 27 locations countrywide. In addition to being known for Matatu insurance, Invesco also offers the following insurance products; commercial vehicles, private vehicles, PSV taxi, fire and allied perils, Workers Injury Benefits Act (WIBA). For the Motor commercial business in the 2017, Invesco suffered a loss of KSh 225 millions having underwritten a total premium of KSh 1.88 billions.
MATATU Insurance Rates
The insurance rates for this business segment is something that is not commonly shared because of the fact that it is only offered by two insurance companies listed above. Previously, AMACO insurance had offered the cover for PSV Matatus but pulled out of the business segment arising out of liabilities and property losses. Most insurance reports in the media also point to the high fraud in the market and the high rate of loss. The vehicles operate close to 18 hours on the road every day, which increases the rate of accidental damage as well.
The Matatu/PSV insurance product is split into the comprehensive part and also the third party cover.
The comprehensive covers the assets itself from damages and also the different accessories both inside and outside the vehicle. This is similar to the cover that is common for other vehicles like the private car insurance and also PSV chauffeur driven insurance.
The below table shows an example of a MATATU PSV insurance quote for 11 passengers vehicle commonly used in Nairobi
|Excess Protector for Own Damage||5,000|
|Political Violence Terrorism||0.000|
|Policy Holder C Tax||363|
|Total Insurance Premium||145,948|
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MATATU PSV Third Party Insurance
While the above table shows the rates for the comprehensive cover, it does not cover the third party liability and also the passenger legal liability. A car insurance for a private car normally combines the asset (vehicle) insurance together with the liabilities insurance. For a Matatu, the liability part of the cover is priced separately and depends on the number of passengers that the Matatu/Bus carries. As for the above example of the 11 passengers Matatu, the rates for the third party cover will be KSh 90,700 for the annual premiums, which may be paid as a one off, in 3 instalments, down all the way up to weekly premiums payments.
Therefore, this brings the total cost of the Matatu insurance to KSh 236,648.
Compare to the rates for private cars or PSV vehicles, it is clear the Matatus have by far the highest pricing for motor vehicles.
An outlay of over KSh 200,000 for the Matatu insurance can be a big burden for many owners, for this reason FINTECH companies have stepped in to provide flexible payment methods. A small start-up has also come in to offer daily payments for the Matatu industry making the lives of the operators much easier.
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If you are looking for an insurance cover for your Matatu or any other PSV vehicle for UBER/BOLT Little Cabs, check out our detailed guide on PSV insurance rates and find out how much you could potentially save, reach us on the online chat, give us a call or or simply visit our offices;