Senators raise concerns over motor insurance premiums hike

On 7 February 2018 at 12:26

Members of the Senate have observed that the recent announced hike in motor insurance could leave some people parked their cars or drive them without insurance.

Senators were speaking yesterday while meeting the Minister of Finance and Economic Planning, Amb. Claver Gatete to who they expressed worries about the abrupt hike in premiums without considering the economic status of the clients.

Senate Vice-President, Fatou Harelimana said that premiums hike will benefit Insurance companies not clients.

She said that it is not understandable how the number of vehicles keeps growing in the country, but insurance companies fail to break even.

“If a person owns a car and earns Rwf200,000 or Rwf300,000, and now motor insurance is doubled but a person remains with the same income, this is a problem. We should not consider ourselves as a developed country,” she said.

“We are hiking insurance premiums but the income of population is not developing. It is a problem. Few people using cars will park them or use them without insurance,” she said.

Senator Ntawukuriryayo Jean Damascène said that hiking prices would best be considered in rhyme with people’s incomes .

“If you increase premiums by 40% while the car owner’s income did not increase by 40%, it will cause some people to use cars without insurance,” he said.

Minister Gatete said that hiking premiums followed a study by Acsterv Consultant Company which aimed at assessing profitability of the sub-sector and determine premium rates.

He said that they raised the premium rates after considering findings of the study. He however assured that there is a new insurance law that is in offing.

About people’s incomes, Gatete said that law governing salaries is also in offing and soon will be taken to the cabinet. He said that the law will solve salary problems.