EDITORIAL: Phasing insurance price hike is a win-win situation

Recently, insurance companies unanimously announced an increment of up to 70 per cent for mandatory motor third-party insurance premiums. The announcement drew public outcry with many describing the insurers as a cartel that took the decision without consultation of key stake holders. Now, it looks like authorities have heard the concerns of the public, and intervened. Yesterday, the association of insurers (ASSAR) president, Gaudens Kanamugire called a press conference, where he said the increment will be implemented in two phases beginning with 60 per cent and 40 per cent respectively. The press conference was attended by the minister of Finance and Economic Planning, Claver Gatete. The development comes as a sigh of relief for consumers of motor vehicle insurance products. Although, the insurers had genuine concerns, the manner in which the implementation was done was contentious. The hike of car insurance premiums has far reaching implications, especially for public transport providers and the quality of services that will be availed in the public transport sector. Motor vehicle owners are key stakeholders in this regard, but there was little or no consultation before the increase was effected. The lesson from this intervention is that for a decision that will greatly affect the public, there should be wide spread consultation with all key stakeholders to avoid similar challenges. Like minister Gatete observed during the press conference, it was very imperative to listen and take into account the demands of consumers before the increment. However, there is also need to continuously sensitize the public about the importance of insurance to help boost the uptake of the insurance products across the country. Presently insurance penetration is recorded at less than 3 percent and this slow penetration has largely been attributed to lack of innovation, unprofessionalism and limited public awareness among other factors.

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EDITORIAL: Phasing insurance price hike is a win-win situation