CIC hires medics to probe claims after flat profit growth
CIC Insurance chief executive Nelson Kuria. Photo/Salaton Njau
What you need to know:
CIC insurance has hired Dr Edward Rukwaro, a former CEO of Mediheal Group of Hospitals, to help turnaround a Sh293.8 million loss in its medical division alone.
CEO Nelson Kuria said that increasing cases of fraudulent claims was behind to a marginal profit growth of 1.4 per cent last year to Sh1.4 billion after-tax earnings.
Dr Rukwaro has specifically been tasked to check suspect claims being recorded mostly in employee group and private vehicle covers.
CIC Insurance has hired a team of medical personnel to investigate suspected fraudulent claims which the firm blames for a steep increase in customer bills which saw the company record a flat growth in profit last year.
The financial services provider, which released its 2013 results Wednesday, has hired Dr Edward Rukwaro, a former CEO of Mediheal Group of Hospitals, to help turnaround a Sh293.8 million loss in its medical division alone.
Chief executive Nelson Kuria said that increasing cases of fraudulent claims was behind to a marginal profit growth of 1.4 per cent last year to Sh1.4 billion after-tax earnings.
Medical claims surged 30 per cent to Sh6 billion, total income which grew 22.2 per cent over the previous year to Sh10.9 billion.
Dr Rukwaro, a former AAR Healthcare and Madison Insurance executive, has specifically been tasked to check suspect claims being recorded mostly in employee group and private vehicle covers.
“The company is bleeding heavily because of fraudulent claims and we believe Dr Rukwaro, who has experience in both the medical and insurance fields, will help oversee a quick turnaround in this business,” said Mr Kuria.
“Some hospitals take patients through unnecessary expensive procedures once they go for simple check-ups.”
The CEO said Dr Rukwaro would be backed by a team of nurses who will scrutinise patients’ medical claims.
High cost and high frequency admissions will attract closer scrutiny, even as CIC plans a review of its premium charges.
“At times, it takes a medical doctor to understand the language used in claims and even detect fraudulent cases,” said Mr Kuria.
Insurance firms have over the years complained of fraudulent claims in medical and motor divisions, which has seen the two marked out as perennially loss making units.
Association of Kenya Insurers CEO Tom Gichuhi, who has raised the issue of fraud in the industry several times, said CIC is set to benefit from having a medical doctor checking claims other than a different professional.
“It is not common for insurers to hire medical doctors to head their medical departments,” said Mr Gichuhi.
“Doctors would, for instance, better understand invoices containing medicine they have knowledge of,” he added.
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