RMB forecasts billions in insurance for S.Africa's taxi industry - CNBC Africa

RMB forecasts billions in insurance for S.Africa's taxi industry

Southern Africa

by Thando Matutu 0

South African street scene with man signalling a taxi PHOTO: Getty images

“We are talking to the single vehicle owners and the fleet owners who have 10 to 15 vehicles,” Derek Vermeulen, Managing director of Commuter and general and RMB structured insurance limited,  told CNBC Africa.

RMB, is an African based corporate and investment bank which has a joint venture with Commuter and General, a South African risk specialist company.

The joint venture between the companies, has established Commuter and General as the under riding manager and RMB as the senior partner to offer investment infrastructure.

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Although considered informal, the South African taxi industry has been circulating money within the local economy for the last 30 years and is considered to be a profitable investment.

“The [South African] taxi industry is worth billions [of rand] and potential for insurance is worth billions [rand],” he said.

Moreover SA Taxi, a South African based vehicle financing company estimated a turnover of 16.5 billion rand being generated in the South African taxi industry per year.

(WATCH VIDEO:Financing SA' taxis)

Although many consider the taxi business to be of a high risk industry,there is definitely opportunity for investment profit.

“Taxis are assets that need to be protected, [that] carry people who need protection” Vermeulen added.

Additional benefits to South African taxi drivers and their passengers will be provided by the insurance scheme during cases of negligent driving.

Usually most taxi owners rely heavily on the Road Accident Fund to cover the cost of accidents.

However the financing proceeds within a 120 day investigation of the lodged claim and then the final proceedings can go ahead.

The insurance body will seek to engage with the various taxi associations and taxi committees in assistance marketing insurance package to the taxi owners.

“At best 50,000 to 200,000 South African taxis remain insured for any meaningful period,” added Vermeulen.