Insurers bow to public outcry, agree to phased premium hike

Insurance companies have finally bowed to public pressure by revising the implementation of the recent sharp increase in insurance premiums for motor vehicles.

Early this month, insurance companies had drastically increased motor vehicle insurance premiums by up to 73 per cent, which attracted outcry from motor vehicle owners across the country.

Many motorists said this was rather drastic and demanded that prices be revised downwards.

The mandatory motor insurance increased for both public and private vehicles, affecting both those who opt for the comprehensive package and the more affordable third-party insurance.

In their defence, insurers had argued that the increment was based on an actuarial study conducted in 2013 in collaboration with the central bank which revealed that prices charged on this particular product were below internationally  accepted rates.

Revised approach

Yesterday, insurers through their body, the Rwanda Insurers’ Association, agreed to implement the new prices in two phases beginning with this year.

However, this does not mean that prices have been reduced either; what it actually means is that motorists will pay the increment but in phases.

Speaking yesterday in presence of the Minister for Finance and Economic Planning, Claver Gatete, the association’s president, Gaudens Kanamugire, said the increment will be implemented in two phases beginning with 60 per cent and 40 per cent respectively.

He reassured that the increment will no longer be implemented in one go at 100 per cent, and this is aimed at among other things, reducing the impact of the hike on different sectors of the economy.

He also revealed that those who had already paid their premiums in accordance with the new tariff, will either be refunded or receive a credit note based on the revised prices.

The New Times

UM– USEKE.RW