Directline Assurance shocks matatus with cashless fare order
Matatus at Kenneth Matiba Street in Nairobi on March 28, 2023.
All public service vehicles (PSVs) insured by Directline Assurance will have to switch to cashless fare platforms including M-Pesa as the insurer moves to curb fraudulent claims emanating from injuries and deaths to passengers.
Directline, which has the largest share of the PSVs insurance market, has issued a circular to all operators of matatus it has covered to make the shift effective February 1, in a move that also offers a revenue boost for banks and telcos that support cashless payments.
The insurer says it has developed a passenger manifest system that will be used when verifying third-party claims. It will be used to offer evidence that people making claims related to injuries or death were indeed in the vehicles involved in the accident.
“All public service vehicles to be insured by the company will be required to register with a cashless passenger manifest system. The company will provide the technology for the consolidation of the same. This will be put in operation through digital fare payment,” said Directline in a circular issued Wednesday.
“To this effect, from 1st February 2024, the company will only issue policies to PSV vehicles that have a registered digital payment method from any of the payment gateways eg. M-Pesa till available in the country.”
Direcline closed June last year with Sh1.66 billion gross premiums from motor commercial PSV covers, giving it a 60.79 per cent market share in this class of business, according to the Insurance Regulatory Authority data.
It was followed at a distance by Xplico (9.7 per cent), Africa Merchant Assurance (9.26 per cent), Invesco (9.01 per cent), and GA Insurance (6.94 per cent). Only 10 insurers in Kenya currently underwrite commercial buses and matatus.
Direcline suffered Sh576.22 million underwriting losses in insuring matatus and buses in the six months ended June 2023, exceeding the Sh311.88 million loss in the full year ended December 2022.
The insurer’s move means passengers who make cash payments in buses and matatus may struggle to get compensation in case of an accident since Directline will only recognise those passengers captured in the digital manifest.
