This archive report was first published on 19 May 2020.
As Kenyans adapt to the new normal under COVID-19 restrictions, Heritage Insurance has taken a proactive approach to support its customers. In a bid to cushion the financial impact of reduced driving, the insurer has announced a reduction in premiums for motorists who have insured their vehicles with Heritage Insurance.
According to data collected by Heritage Insurance through telematics devices fitted in vehicles on its AutoCorrect motor insurance policy, 46 percent of insured motorists drove less in April 2020 compared to their monthly driving range over the previous six months. This significant reduction in driving is attributed to the large number of Kenyans working from home and reduced movement.
Given the reduced exposure, Heritage Insurance is offering a cashback to all Auto Correct policy holders, based on each individual's level of reduced driving in April 2020 compared to their normal driving range. The cashback is a welcome relief for motorists who have seen their driving habits change due to the pandemic.
Godfrey Kioi, Heritage Insurance Kenya's Managing Director, said the move has raised questions for conventional insurance products. 'Kenyans are concerned that while their cars are stationary, insurers are still collecting premiums from them at normal rates. Usage and miles-based insurance provides a solution that allows us to peg pricing on vehicle use and driver behaviour and most importantly, cushion our clients in these tough economic times,' said Kioi.
Mr. Taj Thanawalla, Managing Director of H.G Thanawalla Insurance Brokers Limited, praised Heritage Insurance for providing relief to customers in recognition of reduced driving. 'This discount is a material relief for customers, in these tough times. It is a clear demonstration of the use of innovation to drive data-based and intelligent pricing, for the benefit of both the insured and the insurer,' he said.
Heritage Insurance has also announced a 7.5 percent discount on the annual motor vehicle premium for customers converting to Auto Correct during the months of May, June, and July. The company has also moved to reduce the monthly cost of their motor vehicle premiums by 15 percent for motorists on the motor cover, for the months of May and June 2020.
Mr. Kioi emphasized that the relief will only apply to private cars, for individual customers, insured on a comprehensive basis. 'In the event that a customer already renewed their policies prior to the month of May, the discount will be applied against the renewal premium for the following year,' he said.
Heritage Insurance's innovative approach to insurance has been recognized globally, with a consumer sentiment survey conducted by J.D. Power showing that customers are thinking pragmatically about their auto insurance options, in light of pandemic-related layoffs.
