Car insurance is a mandatory requirement for all vehicles operating on Kenyan roads. It is also the biggest sector in the insurance market accounting for over 25% of the total premiums collected. With over 40 insurance companies in the market, the changing customer is looking for innovation from insurers to offer tailor made and attractive covers. The market has remained fairly stagnant with heavy losses and fraud biting hard on insurance company profitability. With the advent of new international players in the local Kenyan insurance market like Allianz, Cigna and more, things are set to change for the better. In addition, the rise of Fintech start-ups brings online insurance like www.pesabazaar.com have started shifting the industry towards a more agile and customer centric business model. Here we example some of the most common car insurance trends that we can expect to see in the Kenyan market in the coming months and years.
Pay As You Go Car Insurance
In Kenya, the car insurance policy is an annual contract that one enters into without rebate. For some customers, this may not make financial sense for customers that for example are frequent travellers therefore leave their vehicles parked at home. Therefore many providers in the West offer pay as you go car insurance. With the use of telematics, the insurance company can calculate how much the customer is using the vehicle and charge accordingly. One of the biggest providers of pay as you go car insurance is metromile in the USA, customers have saved thousands of dollars especially in urban areas with good public transport systems
This has been around for a while and continues to add value to customers in the market. Customers in the Kenyan car insurance market complain of the fact that they don’t enjoy any benefits from their car insurance policy apart from at the point of an accident. There is no reward for the safe drivers who don’t claim on their insurance policy. The Insurance Regulatory Authority (IRA) had introduced the No Claims Discount (NCD) system but it failed to take off because of the persistent price wars and undercutting from the insurance providers in the market. What is increasingly popular in the USA and Europe markets is cash back and benefits system. Among the list of benefits for well performing customers include
- Vouchers for UBER
- Insurance Premium refunds
- Shopping discounts
- Fuel discounts and vouchers
This system has incentivised customers to take care while driving and has gamified the insurance cover. Customers are urged to drive well and avoid insurance claims in return for appealing rewards and bonuses. A great example of this system is the Discovery car insurance in South Africa which has taken the market by storm.
Peer to Peer Car Insurance
This is a new form of insurance, which is similar to self-insurance. Several high profile insurance start-ups have emerged in the West. The concept is for a customer to get together a group of friends/colleagues/relatives and form a small cluster of say 20. The vehicles in this pool are insured and depending on the performance of this, members can enjoy lower premiums, get back part of the premiums contributed at the end of the insurance period. This kind of peer to peer insurance has been tried in the United Kingdom with a popular start-up Guevara
RideShare Car Insurance
With the explosion of the sharing economy in the 21st century, consumers are moving more and more towards leasing every asset they use as opposed to outright ownership. Therefore, the market for leasing cars, motorcycles, bikes and scooters has exploded especially in West and in Asia. Services like car2go in Italy and scooter sharing bird have revolutionised urban transport. As a result, insurance companies have had to come up with innovative products for this market. Insurance is now offered per hire/ride meaning if the lessor encounters any mishaps, they can be re-imbursed. In addition, many customers have also taken out public liability insurance covers to protect themselves in case they are involved in an accident while operating a leased bike, scooter or car. Quite common also is the provider of these leasing services takes out an insurance cover on the asset for cover when the asset is in and out of use.
GET A CAR INSURANCE QUOTE
If you are looking to compare car insurance quotes from top providers in the Kenyan market, checkout the leading online insurance aggregator in Kenya, get a quote. Compare prices, benefits from multiple providers and also check out the customer reviews to find out what other customers are saying about their experiences.