Markets & Finance

Medical insurance premiums grow on higher uptake

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Britam director of marketing and corporate affairs Muthoga Ngera. Medical insurance surpassed commercial motor vehicle insurance as the largest insured risk class. Photo/FILE

Medical Insurance premiums grew by 55.6 per cent last year following increased uptake of covers.

Data from the Insurance Regulatory Authority indicates that insurers collected premiums worth Sh21 billion last year up from Sh13.5 billion in 2012. This saw the segment surpass the partially statutory commercial motor vehicle insurance as the largest insured risk class.  

“We had increase in sales — the number of accounts went up,” said British American’s director of marketing, Muthoga Ngera.

Britam’s medical premiums rose to Sh1.2 billion from Sh849 million an year earlier.

According to FinAccess National Survey 2013, the number of people with access to private insurance cover doubled in the four years from 2009 to 1.5 million, while those with access to the National Insurance Health Fund (NHIF) more than tripled over the same period to 15.6 million from 4.3 million.

Premiums paid by commercial motor vehicle operators stood at Sh19.6 billion with those paid by private owners at Sh14.1 billion.

More employers have been offering their staff medical cover schemes as part of the remuneration package. NHIF has also been seeking to increase contributions by 600 per cent, but the process has been challenged in court by the workers body Cotu.

Jubilee Insurance continued to dominate the market with gross premium of Sh4.3 billion followed by UAP at Sh3 billion and AAR Insurance with Sh2.6 billion. Jubilee’s dominance was attributed to its contracts with large companies that have many employees.

UAP, however, incurred the highest claims of Sh1.94 billion while Jubilee Insurance had claims worth Sh1.65 billion last year.

“Uptake has gone up following increase in general awareness,” said Isaac Ngaru, a partner with insurance consultants Ngaru and Associates.

READ: Medical cost inflation raises insurance claims by 47pc

Inclusion of Resolution Health following its conversion to a fully-fledged insurance company drove the industry numbers. Resolution Health holds Sh2 billion as gross premiums collected from its medical cover.

Insurers have, however, been complaining of increased fraud within the medical business driven by collusion between some service providers and patients.

CIC Insurance has resorted to hiring medical personnel to investigate suspected fraudulent claims that the firm blames for a steep increase in customer bills. CIC collected premiums worth Sh2.35 billion and incurred claims of Sh1.6 billion, as per the regulator.

“Some hospitals take patients through unnecessary expensive procedures once they go for simple check-ups,” said the company’s chief executive Nelson Kuria while announcing the appointment of Dr Edward Rukwaro to lead the investigations.

The insurers are now going for people at the bottom of the pyramid, with Britam launching a mobile product dubbed Linda Jamii in partnership with Safaricom.

Mr Ngera said the company had opened approximately 5,000 accounts following the launch of the product in January. The cover costs Sh1,000 a month.