The value of outstanding policyholders’ claims has risen for the fourth consecutive quarter to hit Sh39.61 billion. Photo/FILE
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Insurers owe policyholders Sh39bn in delayed payments
The value of outstanding policyholders’ claims has risen for the fourth consecutive quarter to hit Sh39.61 billion at the end of December 2023, showing that insurers are dragging their feet on settling claims.
Latest data from the Insurance Regulatory Authority (IRA) shows the policyholders’ claims, also known as non-liability claims, have surged by a third from Sh29.73 billion at the end of December 2022.
The surge in the non-liability claims has come in the period liability claims—paid to third parties—continued to decline, closing December 2023 at Sh31.68 billion from Sh37.6 billion in the preceding similar period.
IRA computes the value of outstanding claims by adding claims outstanding at the review period to those intimated and revived during the period. It then subtracts the claims paid, those declined or closed as no claims during the same period.
Insurers’ claim payment ratio —a measure of the number of claims paid against the number of claims filed— declined to 61 percent from 67.5 percent for the general non-liability business, showing the impact of slowed claims payment.
Invesco Assurance with a claims payment ratio of 2.5 percent was the lowest. Others who scored poorly on claims payment were Corporate Insurance General (3.9 percent), Kenya Orient (5.4 percent) and Takaful Insurance of Africa Limited General (8.1 percent). Star Discover Micro Insurance was at (97.9 percent), Star Discover Insurance (74.9 percent), Madison General (73.6 percent), Heritage Insurance (82.4 percent) and Jubilee Health (68.2 percent).
Insurers opened the quarter ended December with 1.05 million outstanding claims and received 2.1 million new claims during the period. They settled 1.93 million and closed the year with 1.21 million outstanding claims.
Complaints against insurers rose for the third straight year to 1,878 in 2022, surpassing the 1,686 in the previous year and 1,637 in 2020, with the delayed settlement of claims taking up 63.3 percent of the grievances.
