AKI to launch integrated motor insurance data system, tackle fraudulent claims plaguing sector

 

The Association of Kenya Insurers (AKI) has announced plans to instate a platform dubbed the Integrated Motor Insurance Data System (IMIDS) before the year ends to streamline the claims process, reducing the potential for fraud and eventually reducing the cost of premiums.

The system will be linked with the Kenya Revenue Authority (KRA), Ministry of Transport and the police.

The move follows a recent report by AKI that found the motor private insurance sector is the worst hit by graft after the medical cover insurance sector, having lost close to Sh13.18 billion to claims by the end of 2015.

“Motor private and medical made losses in 2015, and both had loss ratios in excess of 70 per cent. Underwriters are finding it hard to make profit from these products,” AKI Chief Executive Tom Gichuhi said during the launch of the report in Nairobi.

The analysis established that medical insurance cover companies are the worst hit by graft, pushing the industry’s total loss for the segment to Sh310.78 million a year.

The study further projects that the country’s outlook for the insurance sector with non-life insurance might skyrocket by unprecedented rates by the year 2020.

“We have a bullish outlook for the Kenyan insurance sector, with non-life insurance in particular expected to record robust annual growth throughout our five-year forecast period through to 2020,” read the report in part.

The survey indicates that both medical and motor private insurance concerns have been a thorn in the flesh for local insurance firms, a problem attributed to price undercutting among firms and massive fraud.

Motor insurance accounted for 38.7 per cent of the total non-life premium collected, while medical insurance accounted for 26.5 per cent of non-life premiums collected.

In 2015, the industry recorded a growth of 10.5 per cent, helping the whole sector increase its total assets 11.5 per cent to Sh465.98 billion from Sh417.76 billion in 2014.

During the same period under review, liabilities increased by 11.9 per cent to Sh369.79 billion from Sh330.34 billion recorded the previous year.

 

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