Insurance regulator foils Sh310m fraudulent claims

Market News

Insurance regulator foils Sh310m fraudulent claims

Sunday, October 6, 2019 22:00

By PATRICK ALUSHULA

Enhanced surveillance helped Insurance Regulatory Authority (IRA) block Sh310.48 million fraud incidences last year, mostly from motor vehicle owners and insurance agents.

The regulator disclosed in its 2018 annual report that the blocked fraud came in the year its investigative arm — Insurance Fraud Investigation Unit (IFIU) — received and detected 91 cases, down from 168 the previous year.

Of the 91 cases reported last year, majority (20) came from motor vehicle insurance and ranged from fraudulent accident claims to fake car theft claims. Agents followed with 19 cases, down from previous year’s 56, mainly being theft and commission fraud.

The report does not, however, disclose the amount of money that was at stake the previous year. The investigative unit was set up in 2011.

Many insurers said fraud has hurt their profitability, kept premiums relatively high and slowed down claims settlement pace. Tke Association of Kenya Insurers (AKI) said in its 2018 report that use of technology such as blockchain can help lock out fraudulent claims.

“The insurance sector is constantly dealing with fraudulent cases. Adopting blockchain from the onboarding process all the way to claims processing can help reduce manual intervention of information,” said the AKI.

AKI said the technology can help cut paperwork, validate documents from customers and provide permanent audit trails that can be used to identify claims.