This archive report was first published on 1 July 2020.
As the Covid-19 pandemic continues to ravage the world, the insurance sector in Kenya is also feeling the pinch. Medical and Public Service Vehicle (PSV) insurers are emerging as the hardest hit sections in the insurance sector, according to the Insurance Regulatory Authority (IRA).
Speaking during a webinar, IRA CEO Godfrey Kiptum noted that some firms had even paid up to a Sh10 million claim per person for Covid-related treatment. The Association of Kenya Insurers said local insurers have paid over Sh120 million in Covid-19 related claims so far.
The government's cessation of movement, implemented in March, has grounded majority of PSVs, especially those plying long-distance routes. As a result, PSV policies, which are usually paid monthly, have not been renewed in the last three months.
However, IRA Chief Executive Godfrey Kiptum expressed optimism that the sector would recover with the government expected to review restrictions next week. “Insurance covers for PSVs are not being taken. The impact will be quite huge for insurers but we’re hopeful that in coming days, the sector will open up,” he said.
IRA is encouraging companies to offer policyholders’ premium holidays, taking cognisant that economic times are tough. The authority had in April issued a circular to insurance companies to stretch the holidays up to three months, however, insurers are allowed to negotiate within the terms of the contracts with policyholders.
IRA Acting Chief Manager, Technical Kalai Musee warned that claimants might lose money if the brokerages were de-registered. “Brokers usually have a bank guarantee of a minimum of Sh3 million or more. Those owed can make use of those guarantees if a broker is deregistered but if the amounts are more than the guarantee probably there will be losses that will be written off,” he said.
