A contractual dispute between the Association of Kenya Insurers (AKI) and a local IT firm has stalled the implementation of a Sh127 million data management system aimed at curbing fraud in the motor vehicle industry.
In early 2010 AKI engaged Alet Systems to deploy the Integrated Motor Insurance Data System (IMIDS) to manage and share underwriting and claims information between members.
The transparency system would see the consolidation and creation of a central database for insurance certificates, policies, premiums, claims, policy holders and vehicles.
It was intended to enable the public check the status of their insurance policies online or via SMS.
However, the system is yet to be implemented two years later with Alet Systems blaming a powerful cartel within the motor insurance industry that it says wants the project to fail so that they can continue with fraud.
AKI, however, admits there is an unspecified contractual dispute with Alet Systems that it is still addressing. Alet has so far been paid Sh70 million for the work done.
AKI chief executive Tom Gichuhi said the project was to be implemented in three modules: the underwriting, which is fully complete, and the fraud and claims modules that have not started.
"We have some contractual disagreement with the firm that was implementing the project and that is why the project stalled. In implementing such kind of IT project, it is not unique to find that owners of the project have differences with the contractor," Mr Gichuhi said in a telephone interview yesterday.
"The impact of course is that the policy holders and the stakeholders in the sector are not able recoup the expected benefits," he added.
Insurance still remains out of reach for many and the success of the project was expected to help by reducing the cost of insurance. A working IMIDS will see a major reduction in fraud and an increase in profitability for the insurance industry.
With new efficiencies the industry can fully implement the no-claims bonus scheme and reward careful drivers as well as penalise habitual claimants.
The system would also help reduce theft of vehicles for export to neighbouring countries as the stolen cars’ details can be shared with regional security agencies, insurance companies as well as the Interpol.
Other countries that have similar systems include the US where police vehicles are fitted with laptops and can access insurance status of all vehicles.
In South Africa, the industry has set up a database for stolen and written off vehicles to ensure they are not insured or the public duped into buying the units.
In the UK police have access to a similar database and can confiscate all vehicles found on the road uninsured. These systems also offer information on driver conviction and vehicle history such as write-off and financing status.
In Summary
The system is yet to be implemented two years later with Alet Systems blaming a powerful cartel within the motor insurance industry that it says wants the project to fail so that they can continue with fraud.
Insurance still remains out of reach for many and the success of the project was expected to help by reducing the cost of insurance. A working IMIDS will see a major reduction in fraud and an increase in profitability for the insurance industry.
Source Business Daily
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