Government has stepped in to address the stand-off caused by the major hike in insurance premiums on motorcycle taxis, which had left operators worried about the future of this mode of transport and their own livelihood. The issue of these premiums was brought to the attention of lawmakers on Monday, July 26, during a virtual Plenary Sitting of the Chamber of Deputies which adopted the relevance of the new draft law governing land and waterways transport in Rwanda. MP Bizimana Minani told fellow legislators that he had heard claims by insurance companies that about 70 percent of the accident damages they compensated were caused by motorbikes. As a result, he said, some companies refused to provide motorcycle insurance coverage, while others increased premiums. “The consequence was that some motorcycle operators did not buy insurance for their bikes. And, the police realised that there were many bikes in the passenger transport business without insurance, which ended up being impounded,” he said, indicating that motorcycle taxi is needed, but it should be done effectively. “What are the strategies being devised to improve motorcycle taxi as well as reduce the accidents which claim the lives of Rwandans, and ensure that even the insurance companies do not incur losses?” he asked Infrastructure minister Claver Gatete who was in parliament to present the amended transport law. During this plenary session, Gatete told lawmakers that insurance companies did indeed incur losses because of many accidents involving motorcycles, which made them pay more compensations. “That is why a major issue emerged where insurance premiums soared, doubling and even tripling in some cases,” he said. “It even reached a point when only Radiant was the only company offering motorcycle insurance,” he said. However, he said that the Ministry of Finance and Economic Planning was working on ways to intervene. “We held discussions with them [insurers] and they agreed to reduce [the premiums]... it’s no longer Radiant alone. There is an agreed annual premium of Rwf132,000,” he said. Information that The New Times obtained from Radiant Insurance Company in June 2021 indicated that the annual premium increased from Rwf61,666 to Rwf153,280 for a motorcycle that has been on the road for five years. For those that were manufactured between six and 10-years ago, the insurance cover is Rwf166,220, up from Rwf61,666 while those over 10 years pay Rwf180,160 annually. Radiant said that motorbikes are much involved in accidents, and that the compensations paid for the related claims are far more than the premiums they were paying. “For Radiant, in 2020, we collected Rwf2.5 billion in motorcycle insurance premiums, but we paid compensation claims amounting to over Rwf4.7 billion in accidents that motorcycles caused, either to the passengers they were carrying, or other vehicles,” Ovia Kamanzi Tuhairwe, the Deputy Managing Director of Radiant Insurance, told The New Times in June. Zacharias Harerimana, a motorcycle operator from Gasabo District told The New Times that the high insurance premium was a major concern, adding that motorcycle operators also have to meet other expenses such as to provide for their families. “The reduction of the insurance premiums will be of great support,” he said, suggesting that they should be reduced to at least Rwf100,000 per year. Regarding accident claims by insurers, he said that he has been doing motorcycle taxi business for years but he has not yet been involved in any accident that required the insurer to pay any compensation. Speaking to The New Times, Daniel Ngarambe, chairperson of Rwanda Federation of Taxi-Moto Operators (FERWACOTAMO) said that they were much shocked when insurance premiums rose drastically during the Covid-19 pandemic, yet the movement of people was slowed by the pandemic. “During this Covid-19 pandemic, there have been lockdowns and other movement restrictions which reduced the number of people we transport. Increasing insurance premiums does not match this reality,” he said. If motorcycle insurance goes down, it will not just benefit operators but also passengers.
