(Last Updated On: May 12, 2015)
AIG Kenya Insurance has decided to stop accepting new applications for cover for BMW and Subaru cars whose value are below Ksh1.5 million. This was a directive given to all its agents.
The reason for this decision is that the company wants to prevent an increase in the loss ratios on auto. The number of Subaru and BMW write offs is increasing every year and this means that the insurance company has to buy new cars every single time.
Repairing these two types of vehicles is also expensive since the cost of spare parts is fairly high. Most of them have to be imported and there is an additional cost of VAT which is very high.
Most Subarus imported into the country are below the Ksh1.5 million valuation hence have to find an alternative insurer.