Insurers consider single database to fight health cover fraud

The Association of Kenya Insurers (AKI) has announced plans to introduce an integrated health insurance database to curb fraud.

AKI executive director Tom Gichuhi said since the launch of the Integrated Motor Insurance Database System (IMDS) in 2018, the system has saved the industry more than Sh42 million.

“As we move into the future, we will explore possibility of developing a similar system in health insurance,” Mr Gichuhi said. The IMDS is a portal where members can verify underwriting and claims history of an insured.

Through sharing of data, the system generates insights and trends in motor insurance, which makes it easier to detect fraud at both the underwriting and claims level.

“As insurance companies, we collect a lot of data from our customers. If properly mined and analysed, this data can guide industry policy and individual company strategy,” Mr Gichuhi added. This comes as AKI’s 2019 report showed that health insurers suffered a net loss of Sh1.1 billion.

Twelve out of the 21 medical insurers sank into underwriting losses, weighed down by rising claim ratio, fraud and high cost of drugs. Total claims paid out amounted to Sh20.5 billion compared to net earned premiums of Sh27 billion. He urged underwriters to input correct data into the system to allow accurate and reliable outcomes.

Britam General Insurance acting CEO Jackson Theuri said the new system will help reduce fraud that has bedevilled health policy for a while.

“This will improve the ability to share data on frauds among insurers in early identification of fraud and therefore reduce cost of fraudulent claims,” he says.

Moreover, he said fraud in health policies has forced insurers to transfer the extra cost to policy holders. “If you eliminate the inefficiencies in fraud, then it means you are able to give affordable premiums to insured,” Mr Theuri said.