In the first quarter of 2024, insurance companies in Kenya declined an estimated Sh40 million in claims, according to the latest industry figures from the Insurance Regulatory Authority (IRA).
The report indicates that the number of liability claims also increased significantly, rising by 85.4 percent from 41 to 76.
Declined claims refer to requests made by policyholders for which the insurance company has refused payment, either due to reasons outlined in the policy document or for other reasons.
The IRA noted that the increasing number of declined claims contributed to a 71.2 percent rise in the total amount declined, from Sh23.54 million to Sh40.30 million.
These figures highlight the importance for policyholders to carefully review their insurance policies and understand the terms and conditions, as well as the reasons why claims may be denied.
It also underscores the need for transparency and clarity in the claims process to ensure that legitimate claims are honored promptly and fairly.
“The number of non-liability claims declined, increased by 141.8 per cent from 5,258 to 12,715 while the amounts decreased by 23.0 percent from Sh352.92 million to Sh271.77 million,” says IRA in the report
In addition to liability claims, non-liability claims also play a significant role in insurance, involving policyholders asserting that their policy should not cover a certain type of loss or damage because they believe they are not at fault or legally responsible for it.
According to the report, during the period under review, the number of claims declined by long-term insurers decreased by 18.2 percent, from 242 to 198. This decrease led to a corresponding decrease in the total amounts declined by 45.8 percent, from Sh108.63 million to Sh58.86 million.
In the first quarter of 2024, there were fewer general liability claims, but the total amount increased slightly compared to the fourth quarter of 2023. Conversely, general non-liability claims increased both in number and total amount in the first quarter of 2024 compared to the fourth quarter of 2023.
These trends indicate shifts in the types of claims being made and the outcomes of those claims, which insurers and regulators need to monitor closely to ensure fair and efficient claims processing.
“The total actionable claims in Q1 2024 for general liability were 159,273 claims amounting to Sh37.61 billion a decrease in number but increase in amount from 163,317 claims amounting to Sh37.55 billion reported in Q4 2023,” reads the report.
In the first quarter of 2024, a total of 3,663,926 general non-liability claims were reported, amounting to Sh61.69 billion. This marked an increase in both the number and amount compared to the fourth quarter of 2023, where 3,167,116 claims worth Sh57.74 billion were reported.
For long-term actionable claims in Q1 2024, there were 154,153 claims amounting to Sh30.59 billion. Although there was an increase in the number of claims, there was a decrease in the total amount compared to Q4 2023, which had 147,053 claims amounting to Sh30.70 billion.
The review period saw an uptick in claims due to natural disasters, prompting businesses and policyholders to utilize their insurance covers for protection.
Consequently, general liability claims rose by nine percent to 14,109, resulting in insurance companies paying Sh5.6 billion more compared to 2023, totaling Sh5.15 billion.
Non-liability claims paid increased sharply by 19 percent to 2,237,479 claims, equivalent to Sh20.58 billion, up from Sh17.59 billion in the same period last year.
Long-term insurers paid 116,981 claims amounting to Sh20.66 billion in Q1 2024, representing a 9.5 percent increase in the number of claims but a 0.4 percent decrease in the total amount compared to Q4 2023, where 106,822 claims were paid amounting to Sh20.73 billion.
The number of general liability claims closed as no claims decreased by 74.0 percent from 5,891 to 1,530, with the amounts decreasing by 57.2 percent from Sh821.05 million to Sh351.55 million.
For non-liability claims closed as no Claims Payment Statistics for Q1 2024, there was a decrease of 63.0 percent from 16,043 to 5,941 in the number of claims, while the amounts increased by 8.3 percent from Sh1.92 billion to Sh2.08 billion.
