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
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.
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