Businesses & Financial News

Private vehicles gobbled up 4.67Bn loss on insurance firms, REPORT

- Advertisement -

7

 996 total views,  1 views today

Motor private class was the highest loser in the general insurance business in 2019 after posting a loss of Sh4.67Billion, the latest industry report by Association of Kenya Insurers (AKI) shows.

That loss stood at Sh2.70Billion in 2018 and Sh2.74 Billion in 2017 – a surprise jump in claims paid out by insurers and is now being attributed to rampant fraud by some private vehicle owners and their associates – insurance agents and garage owners.

The higher figures in claim rate and losses, is a clear indicator that fraudsters have crammed the market – a major concern for unsuspecting insurance firms who continue to pay out huge amounts of cheques to cheats.

Insurance fraud is a bigger problem in Kenya than it is actually reported with constant cases of fraudsters perpetrating scams stage managing accidents. Common practice includes a scenario where a motorist in front of you will suddenly hit the brakes in the hopes you will hit him and he can fake an injury then report the car and file a claim.

Car insurance is a legal requirement for private and commercial drivers in Kenya and failure to procure motor cover is an offence and drivers may incur huge penalties or get disqualified from driving with types of motor insurance coverage including comprehensive, third party, fire and theft, and third party.

Industry estimates show that over 40 per cent of motor vehicle insurance policies in Kenya are fraudulent according to a Kenyan insure Tech Company Bismart which conducted a study on 146 people settled in Nairobi late last year. The insurance fraud is believed to undermine 8-10 per cent of the turnover of local companies

Auto insurance fraud has risen and so has the number of people who believe cheating their auto insurer is acceptable.

The AKI report also shows that motor commercial class made a loss of Sh2.68billion last year compared to a loss of Sh1.12billion in 2018 while motor combined registered underwriting loss of Sh 7.30billion during the year.

Comments
Loading...

Subscribe to our Newsletter

Signup for more information




Social Media Auto Publish Powered By : XYZScripts.com