A new insurance premium charging system to be effected next month promises to tame rogue motorists by hitting them where it hurts most, the pocket.

Those with bad driving records will pay up to two times the premium charged on good drivers in a move aimed at restoring sanity on Kenyan roads.

The Chairman of the Association of Kenya Insurers, Mr Nelson Kuria, says the new premium pricing method which takes into account experience and accident history is equitable and more sustainable as it falls just short of the points system employed in developed countries to determine who keeps a driving licence.

'Most notable is the Non Claims Discount (NCD) aspect that will reward good drivers with progressively reduced premiums - from a rate of 7.5 per cent to a minimum of 3.8 per cent," said Kuria.

The new rating structure will see drivers with no accident and claims history getting huge discounts on their premiums while the reckless type will pay punitively for their conduct.

In preparation for the new pricing, the Association of Kenyan Insurers is currently implementing the Integrated Motor Insurance Data System, IMIDS expected to give a comprehensive profile of all drivers.

The database will work like that of credit referencing bureaus, where a client is awarded a score showing his/her likeliness to default on a loan, a critical factor in determining interest rates applicable and the decision whether the client is credit-worth or not.

Mr Kuria, who is also the Managing Director of Co-operative Insurance Company (CIC), says for long responsible drivers have had to pay for the misdeeds of their not too cautious counterparts.

Industry players hail the changeover as one that offers accurate pricing of risk. Discovery Insurance Managing Director Douglas Michuki said the factoring of drivers conduct in determining premium levels offers real correlation between risk and price in the industry.

'There has really been no technical effort in ensuring the levels of risk are countered by commensurate prices of premiums in the Kenyan insurance experience' said Michuki.

In countries where a similar model is in effect notably UK and South Africa, premiums for women in a certain age-group for instance tend to be lower compared to their male counterparts who on average cause more accidents.

Players in the business say that for the change to be effective, joint action by all the underwriters is necessary.

'In the first year the premium prices will be high, before beginning to fall in the second and third year, so if not adopted by all players, clients will run to companies offering the standard introductory prices' said Abraham Chami, the marketing manager at General Accident Insurance Company.

Driver denominated premium pricing is currently at a very basic level applying mostly to first time drivers who are expected to pay higher premiums.

Most Insurance companies charge drivers under age 25 years higher premiums, but then due to poor record keeping and lack of information sharing, the more mature reckless drivers have continued to enjoy standard premiums despite posing higher risks.

Other than providing current data on motorists, the Integrated Motor Insurance Data System is expected to effectively to deal with fraudulent claims that have made underwriting especially of the public service vehicles a nightmare.

The motor insurance sector in post independence Kenya was once on this premium pricing model, before cut throat competition in the mid eighties saw players turn to uniform pricing.

But faced with ever growing accident statistics, consensus appears to be fast building among motor underwriters that it's about time they reverted full scale to driver's conduct denominated premiums.