Prudential in race to settle Shield Assurance claims

London-listed insurer Prudential is racing to pay outstanding life insurance claims totalling Sh83 million inherited from the troubled Shield Assurance, which it wholly acquired in September 2014.

Prudential Life told the Business Daily that a total of 2,158 claims remained unpaid as at April 30, 2017 due to lack of proper records to trace beneficiaries.

The British underwriter says it has so far settled more than 16,000 claims totalling Sh400 million from the books it acquired.

“Numerous efforts to try and contact all our customers with a view to settling claims have been made. These efforts have included SMS messages, reminder letters and contact with various employers and agents to get the word out,” said Andrew Greenwood, chief operating officer at Prudential Africa.

“We intend to run a campaign in June to talk about claims and make another plea to Shield customers to come forward,” he said.

Total payout to date arising from the Shield Assurance business is Sh470 million, Prudential said.

The renewed efforts by Prudential Plc — the UK’s biggest insurer — to fast-track payments of overdue claims in Kenya come after official data showed the company had rejected one out of every five claims filed; and, only paid out a third of claims received in the first three months of the year.

Prudential Life rejected 745 claims out of the 4,305 received and settled 1,311 claims to post a claims settlement ratio of 30.5 per cent in March 2017, according to data from the Insurance Regulatory Authority.

Mr Greenwood attributed the 17.3 per cent claim rejection ratio to “either because a customer had filed duplicate claims (i.e. original claim had been incorrectly filled out) or because the customer had previously taken out a loan on the policy and the claim had repaid the loan.”

Shield Assurance owed policy holders about Sh200 million in unpaid benefits after Blue Shield was placed under statutory management on September 17, 2011.

To date, an additional 11,511 claims and maturities have occurred on the Shield Assurance business with a value of more about Sh280 million, Prudential said in an interview.

The Prudential situation reflects the legacy mess in the sector where several underwriters have collapsed. Most of them were general or compost insurers.