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Insurers pay over Sh120 million in Covid-19 related claims

BUSINESS
By Wainaina Wambu | June 4th 2020

Local insurers have paid over Sh120 million in Covid-19 related claims so far, an industry lobby has said.

Tom Gichuhi, the Association of Kenya Insurers (AKI) Executive Director, said that medical insurers have paid out claims worth over Sh12 million while life insurers had settled claims worth Sh108 million.

"As at the end of May, medical insurers had paid out more than Sh12 million in claims. Life insurance companies are also honouring claims and have so far settled claims worth Sh108 million,” he said.

“We continue to assess the situation to determine whether this is sustainable in the longer term,” he added.

Gichuhi reckoned that when the deadly virus was declared a pandemic by the World Health Organisation (WHO), it triggered a quick reaction by local insurers informing the insuring public that claims relating to pandemics were not covered whether expressly excluded in the policies or not.

“It is a global practice to have pandemics as an exclusion in medical and other related insurance policies. This is simply because it is a devastating catastrophe whose spread and the impact cannot be foretold,” he said.

He further noted that Covid-19 related losses could not be priced as it was difficult to determine how long and the impact of the pandemic.

“Risk analysts could not have predicted and still cannot accurately predict how long and what further impact the virus will have. Since the losses cannot yet be assessed, as the pandemic persists, they, therefore, cannot be priced,” he said.

He said the industry was in the process of developing innovative products for front-line health care workers, one of which was a collaboration between three insurance companies.

“The product will offer a wide range of benefits including medical insurance, life insurance, disability and critical illness,” he said.

Covid 19 Time Series

 

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