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Insurers reject Sh523m claims in first quarter
Friday July 14 2023
Insurance Regulatory Authority chairman Mwambu Mabonga at the authority’s Upper Hill office on February 16, 2023. PHOTO | DIANA NGILA | NMG
Insurers rejected 2,708 claims worth Sh523.2 million in the three months to March, marking a seven percent increase from the previous quarter when 6,591 requests worth Sh485.6 million were declined.
Data from the Insurance Regulatory Authority (IRA) show that of those declined, 51 were general liability claims amounting to Sh14.22 million, 2,556 were non-liability valued at Sh437.95 million while 101 were long-term valued at Sh70.98 million.
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A majority, in the medical and motor sectors, were attributed to fraud and delayed filings.
The IRA defines declined claims as requests that an insurer has vetoed for various reasons relating to the policy document or otherwise.
“In Q1 2023, liability and non-liability claims were 51 claims amounting to Sh14.22 million and 2,556 claims amounting to Sh437.95 million respectively. Long-term declined claims were 101 amounting to Sh70.98 million,” said the regulator in its Q1 2023 Claims Report.
During the quarter under review, insurance companies paid out claims worth Sh39.1 billion, with general liability and non-liability claims taking Sh4.6 billion and Sh16.3 billion respectively, as long-term paid claims hit Sh18.2 billion.
This marked a 3.7 percent payout decline from the Sh40.6 billion disbursed in the quarter to last December.
Insurance firms have in recent months decried rising cases of fraud that have bedevilled the sector, with policyholders, especially in the motor sector, making claims on fictional accidents and signing multiple insurance contracts on a single vehicle.
Read: Regulator punishes 10 insurance firms, triples industry fines
A section of motorists has also been found to deploy their vehicles for different activities other than those insured against that translates into higher exposure risk.
