Car repair centre that could drive sleazy agents off-road

CIC Insurance is betting on its assessment and repair facility in Nairobi to leave corrupt agents and brokers with empty food plates on their tables. PHOTO | FILE 

In Summary

• In the pilot programme CIC Insurance says the facility has enabled it to save upto 17 per cent on repair costs after accidents.
• Unscrupulous agents’ nightmare is that if this is replicated across the country, they will have to look elsewhere for bread and butter.

By JAMES NGUNJIRI
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A motor assessment and repair centre in Nairobi is determined to drive sleazy insurance agents, who have thrived on industry chaos to reap big, out of town.

In the pilot programme CIC Insurance says the facility has enabled it to save upto 17 per cent on repair costs after accidents.

Unscrupulous agents’ nightmare is that if this is replicated across the country, they will have to look elsewhere for bread and butter.

The CIC centre has been getting a minimum of 21 vehicles per day, with two assessors who are guaranteed a minimum of 10 vehicles during the time and as a result, they are giving the insurer discounts.

CIC Insurance Group chief executive Tom Gitogo says what they realised is that garages were overcharging them.

He said when brokers take repair work to garages, they take about 10 to 15 per cent commission.

“The brokers got commission when they brought business here (CIC), but they are also getting commission from garages when they take cars there,” said Mr Gitogo. The garages also charge insurers for repair works.

“We are not only repairing the cars but we are also paying through the backdoor – commission to our agents/brokers for taking cars to the garages,” said Mr Gitogo.

Some garages have even been accused of inflicting more damaged on cars presented to them before insurer’s representative arrive. The more the car is damaged, the higher the deal.

The garages then use part of the proceeds to pay commissions to agents and brokers.

For the year ended December 31, 2017, CIC general insurance business recorded an underwriting loss in the motor private cover of Sh537.7 million.

CIC general insurance managing director Elijah Wachira said the centre is convenient for the insured, garages and the inspectors.

Mr Wachira said they have advised their clients that in case of an accident they should tow the car to CIC yard at Upper Hill, Nairobi, near the insurer headquarters.

The service is currently being implemented in Nairobi, but according to the CIC management it will be replicated in other parts of the country.

“When the vehicle arrives, what we are doing is that we are inviting professionals who list all damaged parts. The following day, we invite garages (about four or five of them) per vehicle to come and competitively bid for the repair works,” said Mr Wachira.

“After operating for about four weeks, we have realised that we are saving a minimum of 17 per cent of the repair works.”

He said they have established the savings as a result of using the inspectors they have contracted.

“Ordinarily, assessment takes two to three days. Presently, between the second and third day, we have assessed, identified a garage, and given approval for repair works to commence. So, there is fast turnaround time for the client,” said Mr Wachira.

The CIC system is ensuring that no garage is having more than five vehicles at one particular time, enhancing distribution of work facilitating speed in service delivery.

Bima Intermediaries Association of Kenya (BIAK) a body that represents the interests of insurance agents said as long as it weed outs fraud, then it is welcomed, but if it has other interests then it is an intimidation process.

“If it weeds out fraud, it’s Okay. If not, then it is an intimidating process,” said BIAK chairman Washington Ndegea.

Data from Insurance Regulatory Authority (IRA) shows that for the period January to December 2017, claims incurred under general insurance business for the motor private cover hit Sh13.98 billion, which was the highest.