Insurers paid out Sh175.2 billion in claims during the nine months to September this year, marking a 24.6 percent jump compared to a similar period last year in a surge driven by an increase in filed claims.
Data from the Insurance Regulatory Authority (IRA) shows that the payouts rose from Sh140.6 billion in a similar period last year, adding Sh34.6 billion to the compensation bill and signaling deepening pressure on insurers’ bottom-line.
The number of claims jumped 67.2 percent to 12.9 million cases in the review period, up from 7.7 million a year earlier.
The surge signaled worsening risk such as higher medical and repair costs, as well as increased use that exerted stress on underwriting performance throughout the review period.
General liability claims climbed to Sh16.3 billion from Sh14.7 billion while non-liability claims rose to Sh67.1 billion from Sh57.2 billion.
General liability insurance protects a business from third-party claims for bodily injury, property damage, and personal or advertising injury, while non-liability insurance coverage refers to policies or specific coverages within a policy that protect one’s own property or person.
Long-term insurers paid out Sh91.8 billion, up from Sh68.7 billion as heavy obligations tied to life, pension and investment-linked products experienced larger benefit outflows.
Continued rise in claims came as insurers pushed to strengthen risk controls and enhance fraud detection systems across their operational networks.
Insurance firms have in recent years decried rising cases of fraud that have bedevilled the sector, with policyholders, especially in the motor sector, making claims on fictional accidents and signing multiple insurance contracts on a single vehicle.
A section of motorists has also been found to use their vehicles for different activities other than those insured against that translates into higher exposure risk.
More insurers are adopting digital claims platforms that track patterns, authenticate documents and flag inconsistencies before payouts are approved. Telematics and data-driven pricing models are gaining prominence as underwriters seek to align premiums with actual risk behaviour demonstrated by policyholders.
Insurers have also begun adjusting cover limits, reviewing terms and selectively reducing exposure to high-risk customer categories experiencing frequent and cost-intensive claims.
Further, some underwriters have quietly restricted comprehensive cover for older vehicles or models associated with high accident and theft frequencies in recent reporting cycles.
Others have been reported to reassess benefit structures in medical plans to manage rising treatment costs and limit exposure to inflated invoices from select providers.
Kenya’s insurers view the two largest classes of general insurance, motor and medical, as the worst hit by fraud amid competition that has seen some underwriters underprice and end up struggling to honour claims.
