Regulator puts two insurers on the spot

Insurance Regulatory Authority (IRA) acting CEO Godfrey Kiptum Continental Reinsurance Celebrations of 10 years existence in Kenya, on Thursday, October 11, 2018. [File]  

The insurance regulator has singled out troubled Amaco and Xplico insurance companies over liability issues and rising customer complaints.

Insurance Regulatory Authority (IRA) Chief Executive Godfrey Kiptum said the complaints include delayed payments and disputes on the amount payable.

“IRA has a mandate to handle complaints from policyholders who are not happy with the services of insurers. The authority has received complaints on Xplico and Amaco amongst other insurers,” said Kiptum.

“The complaints are varied including liability issues, delayed payments, disputed amounts payable with most being on motor insurance business,” he said.

Confirming that IRA had reached out to the management of the two firms to put their business to order, Kiptum said IRA would continue to supervise “both offsite and onsite inspection” on the activities of the two insurers alongside others.

“The authority continuously engages the boards and management of insurers and action is taken depending on the issues specific to each insurer,” said Kiptum.

The firms’ financial woes come on the back of the newly introduced risk-based capital requirements that insurers are trying to comply with.

Last year, IRA disclosed that 20 firms, a third of Kenya’s 56 licensed insurers, were not compliant with capital requirements. The insurers have a negligible market share under the general insurance business with Amaco controlling about 1.13 per cent while Xplico controls 1.1 per cent.

In 2018, Amaco and Xplico recorded the highest number of customer dissatisfaction, according to IRA.

The two firms, which largely insure public service vehicles, had 96.49 per cent of complaints from clients owing to delayed claims settlement, rejected claims, incorrect claims and unsatisfactory claim settlements, said IRA.

The motor insurance has been on a downward spiral due to fraud. Data from the Association of Kenya Insurance shows the sub-sector recorded Sh7.3 billion loss in 2019.

In December 2020, Amaco said it had paid almost half of a Sh10.2 million claim that nearly saw it liquidated. The underwriter says it has paid Sh4 billion in claims and legal liabilities in the last three years.