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AIG: Why we’ll not insure Subarus, BMWs worth less than Sh 1.5 million

In a move likely to trigger debate on the structure of motor vehicle cover in the country, AIG Kenya Insurance has written to all its agents to stop accepting applications for cover for BMW and Subaru cars valued below Sh1.5 million.

In a letter addressed to all its intermediaries, the insurer wants such requests referred to its headquarters.

“As a measure to control our increasing loss ratios on auto, we write to inform you that with immediate effect, we shall not accept underwriting of any more new business for Subaru and BMW vehicles valued Sh1.5 million and below. These instructions take effect immediately,” reads the letter dated May 6.

The limit set by the insurer essentially means the majority of used Subaru cars being imported into the country may not get AIG cover because they are either equal to or below the value set.


AIG management confirmed the new conditions, saying the company had arrived at the decision due to the increasing number of write-offs from the two vehicle brands.

“Most of the Subaru claims are usually write-offs, meaning we have to buy new vehicles every now and then,” noted the company.

The cost of parts is also becoming prohibitive.

“The cost of parts for these vehicles is very high, considering they have to be imported most of the time. VAT is very high.”

The company blamed the Kenyan motor insurance industry for not factoring in general lifestyles of drivers in determining premium rates as is the case in developed markets.

This story first appeared in the Daily Nation