Ideas & Debate

EDITORIAL: Digital motor insurance cover a welcome step

AKI plans to eliminate the preprinted stickers
AKI plans to eliminate the preprinted stickers that have been in use for many years. FILE PHOTO | NMG 

The insurance sector has grappled with widespread fraud that has hampered industry growth for years. Indeed, it is the dark horse of the financial industry where banks and other financial intermediaries have run away with the show.

Despite years of effort to change the situation, the criminal elements appear to be ahead of regulation and technology, raking in billions in illegal or irregular earnings.

Both the long-term or life insurance and short-term underwriting, better known as general insurance, have borne the brunt of rogue intermediaries, limiting both the penetration and profitability of the industry. In the midst of this gloom, technology looks likely to play a major role in preventing fraud and saving the industry.

Already, medical insurers have come up with stringent measures, including use of biometric devices to keep away fraudsters. Now they have opted to introduce digital insurance stickers to strike another blow for the industry.

Starting March, the Association of Kenya Insurers (AKI) says it will eliminate the preprinted stickers that have been in use for many years.


Apart from saving the companies the cost of printing and distribution, this is set to reduce fraud in the industry and benefit customers.

For one, criminals will not be able to sell stickers because the digital ones will be emailed directly to customers, meaning that the problem of fake stickers is likely to either drastically reduced or eliminated altogether. Police and other interested parties can scan the digital stickers and get details about the insurer, expiry date and nature of cover.

For consumers, this proposed ship will have immense benefits once it is rolled out.

One, the situation where you needed to physically access the issuer or broker to get the sticker will be eliminated. The fact that you needed to physically display the cover exposed motorists to risk even in cases where they had already paid for insurance. Another problematic aspect of the old sticker is that if lost or mutilated it needed replacement — which was a tedious and time-consuming process to say the list.

With a digital sticker, you can print as many copies as possible and as per need. This also means that police officers cannot detain vehicles unnecessarily by removing the stickers as has been the practice.

Motorists who have been using fake stickers, exposing themselves and other road users to unmitigated risk will now be tamed. In short, fake insurance that was not immediately detectable by the police and other parties will be a thing of the past.