Matatu Owners Association Urges Government to Salvage the Insurance Sector Amidst Fraud, Collapsing Providers, and Systemic Crisis
The matatu insurance industry in Kenya has been plagued by instability for years, with multiple high-profile insurance collapses leaving public transport stakeholders and passengers vulnerable. In light of the latest challenges, the Matatu Owners Association (MOA) is urging the government to take decisive action to prevent further disintegration of the sector.
MOA President Albert Karakacha highlighted the critical role of public transport in Kenya’s economy and warned that the ongoing collapse of major insurance providers poses a significant threat to the industry and the public. He referenced the downfall of insurers like Kenya United Insurance Company, Kenya National, Access Insurance, Stallion Insurance, and Lake Star Insurance. The latest blow comes with the struggles of Directline, once considered a reliable leader in matatu insurance, which has left the sector in a precarious position.
“We are deeply concerned for the common mwananchi, who suffers the most when accidents occur,” said Karakacha. “In many cases, victims are forced to wait years to receive compensation, if they receive it at all, due to widespread corruption and fraud within the judiciary and legal system. We are calling on the government to collaborate with us in finding solutions that include training drivers in road safety, improving vehicle maintenance, and working closely with key stakeholders.”
Karakacha warned that without immediate intervention, the association may be forced to advise its members to withdraw from having insurance coverage altogether—a move that could deprive the government of significant revenue and trigger a broader crisis in the transport and insurance sectors.
The MOA also called on the Law Society of Kenya (LSK) to address rampant insurance fraud involving lawyers. A recent survey revealed that nearly 40% of insurance fraud cases are linked to legal professionals. Furthermore, the association appealed to the Chief Justice to confront the corruption within small claims courts, which has exacerbated the struggles of accident victims seeking justice.
In a bid to stabilize the sector, Karakacha emphasized that the MOA has a comprehensive plan to revitalize Invesco Assurance Company, a key player in matatu insurance. “Invesco is stable under our guidance, and with our strategy, we believe we can reverse the downward trend and establish long-term sustainability for matatu insurance,” he stated.
Karakacha appealed to President William Ruto for direct intervention. He underscored the urgent need for government support in restoring stability and confidence in the industry, urging the President to empower matatu SACCOs and collaborate on a multi-faceted solution that addresses the root causes of the insurance crisis.
Additionally, he stressed the importance of the Insurance Regulatory Authority stepping up to fulfill its regulatory duties effectively, ensuring proper oversight of the industry and protecting both consumers and insurers from further damage.
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