Why the Bykea passenger has insurance coverage but the driver does not

Motorcycle transport company Bykea announced an insurance policy for its passengers last month, but it turns out that the insurance coverage has not been extended to the rider. Only a passenger’s family would receive insurance of up to 400,000 rupees in the event of an accident.

For the runners, says the president of the State Life Insurance Company (SLIC), they were writing a separate policy because there are challenges.

Bykea, in partnership with State Life Pakistan, had announced to cover hospitalization costs, injury treatment costs and compensation for families in the event of death.

They had announced that they would charge their passengers an additional 5 rupees for insurance. An amount of Rs400,000 would be paid to the family if a passenger dies in an accident, and Rs25,000 would be offered in the event of injury.

Any material loss incurred during the journey would also be compensated by the company.

State Life Pakistan Chairman Shoaib Javed Hussain said it was their first collaboration with a technology-based transport provider. “Only passengers were insured in the first phase, but we are also working to expand passenger insurance services,” he told reporters.

“It is easier for the passenger to pay Rs5 per trip to get the services, but the variables change in terms of passengers. A different policy is being developed to cater specifically to runners,” he explained.

Hussain said the purpose of working with Bykea is not to earn more profits but to provide affordable insurance to middle class and poor people in Pakistan.

He announced that State Life will soon also introduce health insurance, which will provide better coverage to customers at lower premiums than the option available in the market.

The head of State Life said Pakistan’s insurance rate of 0.6% is well below the global average of 3.5%. “The insurance rate in many developed countries is over 10%. Even India has an insurance rate of 2.5%, indicating room for improvement in the insurance industry in Pakistan,” he added.

He said state life has approved claims of over Rs 60 billion in 2020 and is expected to approve claims of around Rs 100 billion for 2021.

Earnest L. Veasey