Resolution Health Insurance seeks Sh2bn bailout as complaints pile

Medical cover provider, Resolution Insurance, is seeking a Sh2 billion shareholder capital injection to plug cash flow problems that have seen its customers turned away by some big hospitals for late settlements of bills.

The insurer’s acting Managing Director, Bernard Githinji, in an interview yesterday said shareholders are expected to inject the cash by the end of this month to forestall a deeper crisis.

The company admitted it has struggled to settle customer bills at the Nairobi Hospital, where it has accumulated more than Sh9 million debt.

Resolution Insurance said the bills, which have accumulated since November, need to be reconciled for payment once the shareholder capital injection is received.

“I know there have been complaints and we have been handling each on a case-by-case basis. We have been paying directly for each individual as we work out to resolve the issues with Nairobi Hospital,” said Mr Githinji.

Unresolved issues

“Where we have not agreed we have advised our clients to visit alternative hospitals like Coptic, Avenue Health, and Nairobi Womens,” he added.

The official said the insurer, which has 11 branches across the country, is also having unresolved issues with Aga Khan Hospital regarding charges at its satellite clinics, which it argues should charge lower fees commensurate with tertiary services offered in these outlets.

Resolution Insurance has come under fire as clients poured their frustrations on social media over inability to access health facilities as their medical cover cards get rejected.

The complaints, which have also been filed at the Insurance Regulatory Authority (IRA), have laid bare cash flow constraints at the business.

Resolution Insurance had 30 complaints filed with the IRA, just behind Xplico which had 43 client complaints and Trident which had 25 customer filings according to the IRA quarterly report released in June.

The three insurers recorded a quarter of the 459 insurance complaints filed at the regulator in the six months this year.

There have been increased complaints against insurance companies from motor vehicle garages and loss assessors for delayed payments.

Client complaints may also have risen owing to the regulator's call on all insurance companies to process Covid-19 claims despite reluctance at the onset of the pandemic, as insurers sought to avoid the claims.

Resolution Insurance was founded by businessman Peter Nduati in 2002 as a medical insurance provider in Kenya. The company changed its name from Resolution Health to Resolution Insurance in 2013 as it expanded into East African countries.

UK-based global insurance solutions provider Linkham Group earlier this year said it would acquire a majority stake in Resolution Insurance after agreeing to purchase 100 percent of the equity holding of LeapFrog Investments, a private equity firm backed by US billionaire investor George Soros and JP Morgan, for an undisclosed sum.

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