This archive report was first published on 11 May 2020.
On May 11, 2020, the Insurance Regulatory Authority (IRA) issued a directive that all Covid-19 claims be settled, throwing insurers into uncharted territory.
Industry players have been meeting to develop a joint response to the directive, with Association of Kenya Insurers (AKI) chief executive Tom Gichuhi stating that the companies face great uncertainty if they continue to settle open-ended claims.
Gichuhi said a limit on claims must be set at a level that the industry can withstand, similar to those offered for maternity covers.
“Soon we will be able to tell the public the amount that will be paid per person and the total amount the industry can sustain,” Mr Gichuhi said.
Kenya has confirmed 672 cases of coronavirus out of 32,097 samples, with 32 reported deaths and 207 recoveries from the infectious disease.
Medical claims contributed the second largest portion of premiums at Sh42.4 billion in the last quarter of 2019 and attracted the largest claims at Sh20.4 billion in the same period.
However, medical insurance remains a loss-making segment due to price undercutting, fraud, and high hospital bills, with medical insurers’ underwriting loss doubling to Sh75 million in 2019.
