The two-wheeled killer rides costing Kenya billions in losses

The boda boda industry which is largely informal has been growing tremendously, and so are the accident risks, causing a massive loss for owners, operators and also their victims.

The unstructured nature of the sector has for long made it difficult for riders to be integrated into the formal insurance arrangements which would protect them in cases of accident.

Boda boda associations have also been blamed for lacking strong systems and stability, with some struggling due to weak governance, leaving riders without a reliable framework of support.

Old Mutual Life Assurance Kenya Managing Director Martin Karenju, has pegged the low penetration of insurance on this sector on societal biases. “Insurance has always been perceived as an out of reach thing and that it's not tailored to their specific needs, which further discourages the uptake”.

Data shows that road trauma remains a major economic burden, with road crashes costing the country  between three and five per cent of its annual GDP. This translates to about Sh310 billion lost in productivity, medical treatment and related expenses.

Recent studies show that 1,000 individuals received treatment for motorcycle crash injuries in the last 18-month period, indicating the urgent need for protection.

Further, boda boda casualties stayed minimum of 18 days in hospital, and 28 per cent of patients stayed more than three weeks. Motorcycle users also accounted for roughly 35 per cent of all road accidents fatalities in Kenya in 2023, highlighting the vulnerability of both riders and passengers.

Estimates by the National Transport and Safety Authority (NTSA) point to over 1.6 million active riders nationwide, with more than two million licensed operators. They are a lifeline for urban and rural mobility and an important source of income for young people and families.

According to the Kenya Boda boda Association (KBA), lack of education on how policies work is the main cause of low insurance penetration. 

KBA’s National Executive Chairman, Charles Gichira says another ground for low insurance uptake is ownership of the boda boda as majority of the riders are employed or sub-contracted to ride the motorbikes. With that, incase of an accident, insurance only compensates the person who is on the log book and not the rider.

As a result, most riders flee the scene of the accident since they do not have an insurance cover, or their covers are revoked. 

Reckless driving

“Many riders are reckless and they don't have the skills to be on the border,” Gichira said.

To cushion the risk associated with the venture, Old Mutual has set up a new product offering financial support to boda boda riders, incase income is disrupted due to hospitalisation.

According to the insurer, the cover empowers riders economically by cushioning them and their families against income loss during hospitalisation and easing the burden of funeral expenses incase of fatalities.

“Its design, which leverages daily collections, makes insurance affordable and accessible to low-income earners,” the insurer said.

And as a bridge for enforcement gap, the cover links compliance to claims, a rider not wearing a helmet or engaging in crime is not eligible for compensation. To further enforce safety and user compliance, and reduce claims, the cover denies claims if safety rules are flouted.

“We recognised that there are over 700,000 boda boda riders across the country who play a vital role in driving the economy, yet for a long time they have lacked solid protection for themselves and their families,” Karenju said, adding that the gap has exposed many riders to financial and social vulnerabilities whenever accidents or losses occur.

An audit by the insurer shows that boda riders earn between Sh500 and Sh2,000 daily. For many low income earners, in the event of death, family members are subjected to the burden of funeral contribution to cover funeral cost. However, if covered, the insurance is set to offset the income gaps.

“Accidents divert riders’ and families’ resources, reduce productivity, and strain community welfare, causing systemic losses,” Karenju said.

With the coverage, the riders will get upto Sh1,000 per night and can be for upto 50 nights of hospitalisation.

In the unfortunate event of loss of life, the cover provides a Sh100,000 last expense benefit to the nominated next of kin.

“This product is protection that riders can truly use, but delivered in a way that is simple, fast and fairly priced,” Gichira said.