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Focus on insurance firms as 2016 complaints double

Acting CEO of the Insurance Regulatory Authority Godfrey Kiptum (right) and Daniel Kiange, manager trade facilitation at Kentrade, address journalists after a marine cargo insurance forum in Mombasa. FILE PHOTO | NMG
Acting CEO of the Insurance Regulatory Authority Godfrey Kiptum (right) and Daniel Kiange, manager trade facilitation at Kentrade, address journalists after a marine cargo insurance forum in Mombasa. FILE PHOTO | NMG 

Complaints against insurance firms more than doubled in 2016, new data by the industry regulator showed, piling pressure on players to improve their business operations and enhance transparency.

The Insurance Regulatory Authority (IRA) said 1,080 complaints were filed against insurance companies last year, up from 460 in 2015, an equivalent of a 135 per cent jump.

“The complaints related to delayed settlement of claims, underpayment of claims, declined claims and misselling of insurance products” the regulator said in an industry report for 2016.

Out of the total complaints received, 60 per cent were against general insurers while 40 per cent were against long-term insurers.

The IRA however said about 70 per cent of the grievances were resolved even as it vowed to carry on with a campaign to ensure fair treatment of customers under an initiative known as “Treating Customers Fairly Framework”.

“Under the framework, the industry is expected to demonstrate with evidence that they have treated their customers fairly. A self-assessment tool was designed to enable industry players assess and improve on how they treat their customers” it further said.

The regulator said the overall insurance industry continued to post growth in 2016 despite a Sh1.3billion drop in pre-tax profit.

“During the period under review, the combined industry profit before tax decreased by Sh1.3 billion to Sh12.8 billion in 2016 from Sh14.1 billion recorded in 2015,” it said.

The Acting IRA Chief Executive and Commissioner of Insurance Geoffrey Kiptum attributes the fall in profit before tax to a fall in income and low insurance penetration in the country.

During the period under review, the industry’s income dropped by Sh0.2 billion from Sh1.6 billion in 2015 to Sh1.4 billion in 2016.

Insurance penetration on the other hand fell to 2.73 per cent last year, compared to 2.83 per cent in 2015, according to the IRA report.
This is the lowest since 2014, when the industry’s penetration stood at 2.9 per cent.

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