Motorcycle insurance premiums remain unchanged despite Government’s promise to help lower them. Motorbike operators decry heft fees, yet insurers argue that they are still unable to make profit even with the current ‘high’ premiums. They made the disclosure on Monday, November 28, during a session in which the Senate's Committee on Foreign Affairs, Cooperation and Security started meeting with different entities in line with understanding the actions meant for preventing and tackling road accidents. They were represented by Marc Rugenera, the Managing Director of Radiant Insurance Company, who was standing in for the Chairperson of the Rwanda Insurers’ Association (ASSAR) – which brings together 14 locally registered insurance firms in the country. Rugenera was with Denise Rwakayija, the Managing Director of ASSAR. On August 25 this year, a motorcycle taxi operator, Pierre Bizimana, based in Ruhango District, appealed to President Paul Kagame to help bring down motorcycle insurance premiums that were ‘too high’, something he described a heavy burden for motorcycle taxi operators. According to Bizimana, he was paying a bill of Rwf165,000 only for motorcycle insurance annually, and when he added to other charges, he could barely win bread for his family. It was during President Kagame’s citizen outreach tour where he met over 50,000 residents who had convened in Ruhango District, Southern Province. The president promised taxi moto operators a quick and permanent solution to their hefty insurance bills, an issue that has plagued the industry for months. According to the Minister for Infrastructure, Ernest Nsabimana, who also attended the Ruhango event, the government would announce new insurance premiums in the next two months (starting from August). But over three months have elapsed so far, and no change has been made in the motorbike insurance premiums. Rugenera told senators that motorcycle insurance scheme was not profitable as insurers were incurring losses because of the fact that these automobiles are responsible for the majority of accidents, pointing out that the compensations paid to the victims exceed, by far, the premiums they collected. As Radiant Insurance Company, in 2019, we paid over Rwf 2 billion in compensations to victims of accidents caused by motorcycles, while we had collected over Rwf1 billion. That means the payout was 201 per cent, or two times higher than the amount we collected,” he said. “In 2020 we paid over Rwf 2.9 billion in compensations, while we had gotten over Rwf 1 billion in motorcycle insurance premiums, implying that the expenditure was 247 per cent compared to the premiums,'' he indicated. He went on to say that in 2021, Radiant Insurance Company spent more than Rwf 3 billion on compensations to the victims of accidents produced by motorcycles, while its premiums paid by motorcycle owners amounted to over Rwf2.5 billion, meaning that the expenses were 181 per cent of the collected fees. “But the reason (for the decrease in the premiums and compensation payment) was due to the increase of insurance premiums,” he explained. Considering the Central Bank regulation rates, Rugenera told legislators that the company was falling short of the requirements even after raising insurance premiums, informing them that for it to meet them, it would require to increase them further by 70 per cent. “So there is what we call the claim ratio. The law says that the claim ratio must not go above 60 per cent, that's what BNR says and the management ratio (including paying employees’ salaries) must not go above 30 per cent. So, we can say we don't really get anything. If we don't increase the insurance, then we won’t be able to pay for the damages caused by the accidents.” Also, insurers said that the minimum amount of Rwf3,000 – equivalent to over Rwf1 million per year – which judges base on while determining indemnities for an accident victim who has no defined salaried job, is a major concern to insurers as it makes them pay more money to such victims. This situation, Rugenera said, was a result of lack of legally set minimum wage, despite the Government promise to put it in place from 2018. Current insurance premiums by Radiant Insurance Information from Radiant Insurance Company indicates that the annual insurance premium increased from Rwf61,666 to Rwf 153,280 for a motorcycle that was manufactured five years ago or less. Motorcycles that were manufactured six to 10 years ago pay an insurance premium of Rwf166,220, up from Rwf61,666 while those that were made more than 10 years ago pay Rwf180,160.
