• The move is in line with the shift to digital certificate aimed at minimising insurance fraud by ensuring the issuance of only one motor insurance certificate per vehicle.
• In addition, it will minimize cases of double insurance, fake certificates, and stolen insurance certificates.
Image: FILE
The Association of Kenya Insurers has announced a plan to stop issuance of physical motor insurance certificates.
In a circular to CEOs of members companies of general insurance underwriters Association of Kenya Insurers, Executive Director Tom Gichuhi said the plan takes effect on March 1.
"This is to inform members that with effect from 1st March 2021, no more physical motor insurance certificates will be issued by the secretariat. Kindly note and inform your staff accordingly," read the circular.
The move is in line with the shift to digital certificate aimed at minimising insurance fraud by ensuring the issuance of only one motor insurance certificate per vehicle.
In addition, it will minimize cases of double insurance, fake certificates, and stolen insurance certificates.
The shift will also play a key role in assisting traffic officers to solve some of the challenges they face with regard to authenticating the validity of motor insurance.
The digital certificate will help with instant verification of insurance and this will go a long way in supporting service delivery by the police.
The insurers developed the virtual motor insurance certificate that would among others allow insurance firms to issue insurance certificates to clients via digital platforms.
The roll-out programme introduced in October 2019 with motorcycle certificates will now see all motorists issued with digital certificates to operate on the Kenyan roads.
The virtual certificates were to run concurrently with the physical certificates until mid last year when they were to be phased off.
In this case, motorists would print the digital certificate, cut it, and stick to their windscreen.
According to AKI, the virtual certificate appearance and details will be the same as the physical certificates.
Motorists can verify the authenticity by scanning the certificate via the AKI app or dialing short code *352# thus ensuring authenticity of the document.
Over the years many insurers have faulted fraud for their poor profitability, with premiums remaining relatively high while slowing down the claims settlement process.
While motor private and medical business classes are the largest, they are also among the most loss-making businesses in the industry.
This has resulted in fraudulent claims eating into over 25 per cent of earnings in the underwriting industry.
According to AKI, fraud, especially in the motor insurance sector can be minimized significantly by ensuring only one motor insurance certificate is issued per vehicle, digitally.
The Integrated Motor Insurance Database System (IMIDS) saved the industry over Sh40million in fraudulent claims in 2019, a figure expected to increase as more insurance companies share data via the system.
A survey by AKI shows that 22 per cent of motor vehicle insurance policies cannot be verified while another 12 per cent of the covers simply do not exist in the books of underwriters despite payment of premiums for the cover.