Insurers reject Sh396m Covid medical bills

Insurers rejected Sh396 million worth of hospital bills related to Covid-19, highlighting their cautionary stance in footing pandemic-related expenses.

A total of Sh1.3 billion was paid out by medical insurance companies to cover treatment of Covid-19 for the period March 2020 to June 2021, the Association of Kenya Insurers (AKI), the industry lobby group said Thursday.

This figure represents 74 percent of the total claims lodged with medical insurers which stood at Sh1.7 billion.

Kenya reported the first Covid-19 case on March 13, prompting the State to impose measures such as a dusk-to-dawn curfew, social distancing and work-from-home calls.

Covid-19 cases in Kenya have jumped to 252,308 as of Tuesday since March last year with cumulative deaths standing at 5,238 cases.

Insurers had raised the alarm on the rising burden of covering Covid-19 patients.

Medical insurers were forced to foot Covid-19 vaccination bills for policyholders from May last year after the regulator directed them to update their policies.

Insurers had initially told clients they were not going to pay any claims related to the pandemic, but later softened their stance even as pressure mounted on underwriters worldwide to support clients.

The AKI said yesterday not all claims that were lodged during the period March 2020 to June 2021 were paid and linked this “to the different scope of covers.”

To avoid future arguments with customers, insurers are simplifying the wording of their contracts and stating openly what is covered or excluded in order to cultivate trust between them and their clients.

The rejected claims, represented 23.3 percent of the total claims. The remaining three per cent, Sh37 million is outstanding, due to various policy conditions or terms.

A total of 15,522 claims were lodged during the period. Out of these 3,934 were inpatient claims while 11,588 were outpatient, said AKI.

Medical insurance is the second-largest class of short-term insurance business after motor insurance, in terms of gross written premium.

In 2020, the medical insurance business grew by 4.58 percent to record a gross written premium of Sh44 billion compared to Sh42 billion in 2019.

Claims incurred and total expenses also increased by three percent and 11 percent respectively during the same period. Underwriting profit increased from Sh204 million in 2019 to Sh1.7 billion in 2020.