The insurance fraud in Kenya is increasing. The resurgence of this practice impacts the solvency of insurance companies which report huge losses due to false statements.
The latter accounts for 9% of paid claims and contribute to a 25% rise in premiums.
According to the Insurance Regulatory Authority (IRA), market players should be equipped with risk management system to anticipate fraud. Currently, only 32% of insurance companies meet this criterion.
Non life classes (motor and health insurance) are most affected by these malpractices. In 2014, the non life incurred losses amounted to 41.9 billion KES (470.5 million USD), up by 25.4% compared to 33.4 billion KES (392.5 million USD) in 2013.
During the same year, the premiums of the Kenyan market grew by 20.4%. They went up from 131 billion KES (1.5 billion USD) in 2013 to 157.8 billion KES (1.8 billion USD) in 2014, with 101.3 billion KES (1.14 billion USD) allocated to non life insurance, that is 64.2% of total underwritings.
Growth calculated in local currency