Insurers in Kenya have so far paid Sh120 million towards coronavirus related claims.
According to the Association of Kenya Insurers (AKI) executive director, Tom Gichuhi, just like any other catastrophe, coronavirus caught the sector flatfooted.
He said the life segment has attracted the biggest pie of paid claims estimated at Sh108 million followed by medical at Sh12 million as of May.
''We continue to assess the situation to determine whether this is sustainable in the longer term,’’ Gichuhi said.
He added that the industry is also in the process of developing innovative products for frontline health care workers.
''A pioneer product has been developed by a consortium of three insurance companies. The product will offer a wide range of benefits including medical insurance, life insurance, disability and critical illness for the health care workers,’’ Gichuhi said.
He revealed that technical elements are being worked on before forwarding to the Insurance Regulatory Authority (IRA) for approval soon.
Settlement of coronavirus related claims by insurance firms in Kenya perhaps is to soften the hard stance announced by AKI when the World Health Organisation (WHO) declared the virus as a global pandemic in March.
The insurers' lobby said the classification of the disease as pandemic indicates that victims will settle their own bills, sparking uproar in the market.
This forced the insurance regulator IRA to summon insurance firms for an urgent meeting where it was resolved that they will cover medical costs.
''Insurance firms will cover all policyholders affected. Standard medical insurance typically excludes epidemics and pandemics,’’ IRA said in a statement after the meeting.
The statement by AKI yesterday suggested that they were forced to breach normal insurance policies to accommodate coronavirus effects.
''It is a global practice to have pandemics as an exclusion in medical and other related insurance policies. This is simply because it is a devastating catastrophe whose spread and the impact cannot be foretold,’’ Gichuhi said.
He however said that the pandemic has taught the sector tough lessons that will inform product formulation going forward.
According to AKI, industry operations have been altered to adapt to the new normal, catalysing usage of technology to reach and serve customers and also run businesses online.
''This is an opportunity for the global insurance and reinsurance industry to develop products that could help the world deal with such risks,’’ Gichuhi said.
