The difficulties facing operations Motor Insurance management and operational risk in Kenyan Insurance Company

Shown by

Moses Mbwika- 11-909

Dr . Peter Ngure

Daily news submitted in partial happiness of the study course BUS 611: Business Research Methods

Daystar University

Nairobi, Kenya

29th April 2012


1 . 1 . Background of the study

Although the precise date of birth of the industry in East The african continent is unfamiliar, there is evidence that the initial marine company was established in the Island of Zanzibar in 1879. It was a little while until another 14 years before another ocean agency was established in Kenya in 1891. Motor vehicle owners in Kenya were legally compelled to get insurance against traffic injuries involving third parties in the the middle of 1940s within the Road Traffic Action (RTA). The of community service automobiles (PSV) goes back to the 1950s when there appeared a new form of cab operating between the city center of Nairobi and Makadara in Eastland of the city. The fare, irrespective of distance was 25 cents, the Kiswahili comparative being " mapeni matatu, ' which has been adopted since reference to this taxi and shortened to " Matatu” (Timbwa, 1985). The origin of Matatu industry can be tracked from the sort of transport system that managed in villages in the early on 1960s. In the beginning, the Kenya Bus Assistance existed since 1934 because the sole legal provider of public transport services. It had been jointly held by the United Transport Overseas Ltd (75%) and the Nairobi City Authorities (25% from the shares). Community transport in Kenya, specially in urban areas can be dominated simply by Matatu automobiles. In the early on 1960s, the entire number of Matatus operating in the was less than 400 and operated in form of taxis. In 1973, President Jomo Kenyatta, responding to lobbying from Matatu workers declared that they were the best mode of transport and could carry do paying people without obtaining special permit to do so yet had to abide by existing insurance and traffic regulations (Aduwo, 1992).

By 1990, of the 333, 300 cars registered near your vicinity, 17, 600 were Matatus (Bhushan, 93 cited in Muyia, 1995). By 2003, the number of Matatus operating in the two urban and rural areas was estimated at forty, 000 (Asingo, 2004). They will comprised of Nissans, mini-buses and pickups. That they provided work to almost 160, 500 persons and generated huge revenue intended for the Government in form of charges for permits, duty, VALUE-ADDED TAX and other income taxes.

In addition , the industry plays a top role in transportation of persons and goods in both country and urban areas. Unfortunately, the industry's great growth continues to be accompanied by increasing road traffic injuries that have insecure safety of Kenyan travellers. The accidents increased simply by 182% coming from 3, 578 in 1963 to twelve, 106 in 1989 and 11, 785 in year 1994 (Muyia, 1995). In these mishaps, 2, 014 persons had been killed, 6th, 650 were seriously injured and 10, 094 got minor traumas. The causes of the accidents included reckless driving, non-roadworthy vehicles, overloading and poor circumstances of the tracks.

1 . 1 ) 1 . Underwriting

Underwriting may be the selection and rating of risks by the insurer (Canner, 2007). There are many considerations that guide the underwriting process resulting in the decision since whether to accept a given risk or not really and if acknowledged at what premium rate. The key considerations in motor unit underwriting incorporate; Use of your vehicle, District of garage, Generate and form of the vehicle, with capacity of and holding capacity, the sort of cover essential, the driver's details and the value and age of the automobile.

Use, refers to perhaps the vehicle is public work with or Non-public hire. District of garage area refers to the address where the vehicle is generally garaged. Generate and form of the vehicle specifies whether the vehicle is a great Isuzu truck, Toyota gargote, Mazda bus etc . With capacity of and holding capacity refers to the number of individuals including the new driver and...

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