Businesses & Financial News

Underwriters report dip in insurance claims

By Steve Umidha

Kenya’s insurance sector recorded a 4 percent dip in the claims paid for the fourth quarter in the period ended December 2021, latest industry figures show.

Data by the Insurance Regulatory Authority (IRA) tabulated between October and December last year, shows that insurance claims dipped to 2 million compared to 2.1 million claims the industry managed in the previous quarter.

During the period under review underwriters reported 1,932,047 general non – liability claims from 2,024, 073 reported in the previous quarter while general liability claims went up by 11 percent to 16, 665 up from 14,989, in Quarter 3 (Q3), 2021.

The report released yesterday further shows that the term insurance business dropped by 2 percent in the number of claims reported to 93, 231 compared to 95,251 claims reported in the quarter ending September 2021.

Paid claims on the other hand went up by 21 percent to 2.3 million compared to 1.9 million claims paid in the July-September 2021 period.

“In Q4 2021, the claims payment ratio for general liability claims decreased to 9.5 percent compared to Q3 2021 that stood at10.2 percent. The claims payment ratio for general non-liability claims increased to 77.1 percent in Q4 2021 from 64.6 percent reported in Q3 2021. The claims payment ratio for the long-term insurance business increased to 74.6 percent compared to 74.1 percent observed in the previous quarter,” reads the report in part.

An insurance claim is a formal request by a policyholder or an individual taking up an indemnity cover to an insurance company for coverage or compensation for a covered loss or policy event. An insurer then validates the claim and, once approved, issues payment to the insured or an approved interested party on behalf of the insured

Such claims are often denied if there is a dispute as to fault or liability.

Companies will only agree to pay you if there’s clear evidence to show that their policyholder is to blame for your injuries. But in an event there is any indication that their policyholder isn’t responsible then the insurer will deny your claim.

The latest statistics come amid concerns that the upcoming general elections may lead to an increased uptake of political violence and terrorism indemnity covers in what could see insurance companies pay out more in terms of claims should policyholders’ businesses compromised because of skirmishes often seen when poll results go south – akin to 2007 and 2017 interruptions.

But that uptake could also business opportunities of the insurers if business environment is not affected by the final presidential results slated for August 2022, according to the Association of Kenya Insurers (AKI) – the industry lobby group, who last month predicted a glut this year from the insurance class for the sector which dodged the Coronavirus bullet last year.

“While we are expecting the appetite to increase this year, I do not foresee a huge spike owing to the fact that Kenyans have matured and that the exposure may not be as big as it was in the past,” commented Mr. Gichuhi in a previous telephone interview.

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