Kenya insurers lose Sh260m to fraudsters in three months

NAIROBI: Insurance companies lost Sh259.7 million to fraud in the first quarter of this year.

According to a report from the Insurance Regulatory Authority (IRA), 26 cases of fictitious payments were reported between January and March.

Commissioner of Insurance and IRA Chief Executive Officer Sammy Makove noted in the report that despite the high number of fraud cases reported, there were no incidents of theft by employees in the quarter.

The report additionally revealed that four cases from previous years were finalised, with six people arraigned in court and charged.


“The fraud cases were reported in life assurance, insurance agents and agencies, policyholders, medical, and motor business segments,” said Mr Makove.

Further, whereas the public service vehicle (PSV) and motor underwriting business in the past accounted for a majority of the fraud cases in the insurance industry, the trend appears to be changing.

During the period under review, fabricated payments on motor claims accounted for Sh18 million, or 7 per cent, of the total amount lost to fraud.

Makove said the companies that fell prey to false motor cases paid out for false injury, forged insurance certificates, and fraudulent damage and theft claims.

On the income side of things, insurance premiums grew 16.4 per cent in the first three months of the year.

“The 2015 quarter one premiums stood at Sh50.41 billion, growing from Sh43.29 billion reported over a similar period last year.

“The premium income reported under the life insurance business amounted to Sh15.98 billion, while general business premiums were Sh34.43 billion. The Kenyan insurance industry continues to be non-life driven,” Makove said.

He added that reinsurance companies reported Sh2.94 billion in premiums, an 8.3 per cent drop from Sh3.20 billion reported in quarter one of 2014.