The difficulties facing operations Motor Insurance management and operational risk in Kenyan Insurance Company
Moses Mbwika- 11-909
Dr . Peter Ngure
Daily news submitted in partial happiness of the study course BUS 611: Business Research Methods
29th April 2012
CHAPTER 1: INTRODUCTION
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 " MatatuвЂќ (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...
Recommendations: Aduwo, G. O. and Obudho, 3rd there’s r. A. 1992, Urban transport system: A case of the Matatu mode of transport in the city of Nairobi, Kenya. In: African Downtown Quarterly, Vo. 7.
AKI, 2007, вЂGeneral Insurance Update', AKI Message.
Anyanzwa, T. (2010), вЂPSV Insurer Roll-outs Bid to make Capital', The East Photography equipment Standard.
Asingo, P. Um. (2004), The Insitutional and Organizational Framework of the General public Road Transport in Kenya, IPAR Debate Paper Number 50.
Cannar, K. (2007), Motor Insurance, CII Educational costs Text.
Chitere, P. Um (2004), вЂMatatu industry in Kenya: A study of the overall performance of the owners, workers and the associations and potential for improvement', The Granary, Kenya.
Chitere, S. O and Kibua, T. N
Connellan, T. T and Zemke, R (1998). Sustaining Hit your Clothes off Services: American Administration Association: New York.
Cook, H (2005). Customer service excellence: How to create an efficient customer Emphasis. 5th edition, Replika Press Pvt. limited India.
Dionne, G and Doherty, In. A. (1994), Adverse Collection, Commitment and Renegotiation: Extension to and Evidence via Insurance Markets, Journal of Political Economy, 102, pp. 209 -235.
Gachuki, D. 2004, A quick Commentary about Legal See No . 161, IPAR, Nairobi Republic of Kenya 2003 and 2004 Legal Notices Nos. 161, 83 and 97.
Gichuhi, T. (2009), вЂInsurance rates, the work of any cartel or market pushes at play? ' The Financial Post.
GOK (2007), The Insurance Work Cap 487 Laws of Kenya. Modified Edition, Government Printer Sector in Kenya.
IRA, 2009, вЂMotor Underwriting Guidelines'.
IRA, 2010, вЂMotor Underwriting Rules Clarification Circular'.
IRA record (2007). End of yr report. 31stDecember. Government printer.
Irungu, W. (2004). Promises payment: Effect on customer service: The Kenya insurance firm Journal 2(2), Nairobi.
Jonah, B. A. (1986), Crash Risk and Risk-taking Conduct Among Youthful Drivers, Accid Anal Prev, 18, pp. 255-271.
Kapila, S., Manundu, M and Lamba, D. 1986, The Matatu mode of public transportation in metropolitan Nairobi. Nairobi: Mazingira Institute.
Khayesi, M. (1999), The Have difficulties for Regulatory and Economical Sphere of Influence in the Matatu Method of Transport in Kenya: A Stakeholder Examination, Sixth Foreign Conference about Competition and Ownership in Land Traveling Transport.
Khayesi, M. 97 Matatu personnel in Nairobi, Thika and Ruiru towns, Kenya: Analysis report, Company for Advancement Studies, Nairobi.
Kimani, L. N., Kibua, T. In. and Masinde, M. (2004), The Function of the Matatu in Kenya: Economic Costs, Benefits and Policy Concerns, Discussion Newspaper No . 053/2004, Institute of Policy Research and Analysis.
Kothari, C R, (2003). Research Technique Method and techniques. Second edition. Wishwa Prakashan New Delhi.
Kuria, C. D, (2009), вЂState of Insurance Industry', AKI Annual General Meeting, 26th March, 2009.
Laudon, K. C and Laudon, M. P, (2007). Essentials of Business Details systems, seventh edition, Pearson education Inc.
Lev, B, (2001). Intangibles Management, Way of measuring and Confirming Washington POWER: Brookings Start Press.
Lovelock and Cristopher (2001). Providers Marketing: Persons, Technology, Strategy, 4th Release, Prentice Hall.
Macharia, 3rd there’s r. W. (2009), The Electric motor Industry in Kenya: Adopting the No-Fault Insurance System, Journal of Social Science.
Maina, G. M. (2001). Perceived service quality. The situation of Mobile phone services in Kenya. El Published MASTER OF BUSINESS ADMINISTATION project, University of Nairobi.
Makembo, H. M. (1992), вЂAn Research of the Concerns in the Settlement System for Personal Injuries and Deaths in Motor Insurance in Kenya', Unpublished MBA Project, University of Nairobi, Nairobi, Kenya.
Makove, S. (2009), вЂInsurance premiums, the work of a affiliation or marketplace forces for play? ' The Economic Post.
Marwa S. (2007), вЂPrinciples of Insurance', Requirements of Risk and Insurance, Jomo Kenyatta Foundation.
Mugenda A. and Mugenda To. (2003). Exploration Methods. Quantitative and Qualitative Approaches. Photography equipment Centre pertaining to Technology Research (ACTS Press), Nairobi, Kenya.
Muhindi, T. (2009), вЂInsurance premiums, the job of a agglomeration or marketplace forces for play? ' The Financial Post.
Munguti, P. (2006). Where perform Insurers Fail? The Underwriting standards Or perhaps Handling says. Journal of the Association Of Kenya Insurance providers, (1), Nairobi.
Mutai, M. (2003). How you can write quality Research Proposal. A Complete and simplified Formula. Nairobi: The Lley publications.
Muyia, 95 The forgotten workers: The case of general public service individuals in Eldoret Town, Kenya, http://www.ossrea.net/ssrr/muyia.htm.
Ndung'u, J. (2009), PSV Insurance Insolvent- Carteggio, Daily Nation, 25th The spring, 2009.
Njagi, N. (1997). Factors impacting customer service in the banking market. Unpublished MBA project conventional paper, faculty of commerce, College or university of Nairobi.
Odero, Watts., Khayesi, M. and Heda, P. Meters. 2003 Road traffic injuries in Kenya: Degree, causes and status. In: Injury Control and Safety Promotion, Volume. 10 (1-2).
Okoth, L. (2009), вЂCollapse of Standard Assurance leads to fresh market jitters' The normal 17th 03, 2009.
Olotch, W. (2006) The Insurance Industry, The Photography equipment Reinsurer, Vol. 20 06, 2006.
Omogeni, J (2009) вЂInsurance rates, the work of any cartel or market makes? ' The Financial Content.
Omondi, G. (1988), вЂA Study of the Operations from the Kenya Electric motor Insurance Pool', Unpublished MBA Thesis, University or college of Nairobi, Nairobi, Kenya.
Ondari, T. (2009), PSV Insurance Insolvent- Dossier, Daily Nation, 25th April, 2009.
Oyare, L. (2004) Client Value Proposition: Quality and Business method Engineering: Diary of relationship of Kenya Insures, 2(2), Nairobi.