Insurance companies declined to pay an estimated Sh40 million in claims in the three months to March 2024, latest industry figures show.
The quarter one report by Insurance Regulatory Authority shows that the number of liability claims declined, increase by 85.4 per cent from 41 to 76.
Claims declined are the request by policyholders that the insurance company has declined to pay for various reasons as per policy document or otherwise.
IRA says that an increasing number of declined claims saw the amounts declined increased by 71.2 per cent from Sh23.54 million to Sh40.30 million.
“The number of non-liability claims declined, increased by 141.8 per cent from 5,258 to 12,715 while the amounts decreased by 23.0 percent from Sh352.92 million to Sh271.77 million,” says IRA in the report
A non-liability claim is those that involve a policyholder asserting that their policy should not cover a certain type of loss or damage because they believe they are not at fault or legally responsible for it.
The report further says during the period under review, the number of claims declined by the long-term insurers dropped by 18.2 per cent from 242 to 198.
This consequently saw the amounts decrease by 45.8per cent from Sh108.63 million to Sh58.86 million.
In Q1 2024, there were fewer general liability claims but the total amount increased slightly compared to Q4 2023. On the other hand, general non-liability claims increased both in number and total amount in Q1 2024 compared to Q4 2023.
“The total actionable claims in Q1 2024 for general liability were 159,273 claims amounting to Sh37.61 billion a decrease in number but increase in amount from 163,317 claims amounting to Sh37.55 billion reported in Q4 2023,” reads the report.
A total of 3,663,926 claims amounting to Sh61.69 billion were reported for general non-liability claims, an increase in number and amount from 3,167,116 claims worth Sh57.74 billion reported in Q4 2023.
Long-term actionable claims in Q1 2024 were 154,153 claims amounting to Sh30.59 billion an increase in number but a decrease in amount from 147,053 claims amounting to Sh30.70 billion reported in Q4 2023.
The review period reported an increase in claims as natural disasters saw businesses and policyholders resort to their covers as cushion.
This in turn saw the general liability claims rise by nine percent to 14,109 forcing the insurance companies to pay Sh5.6 billion more from Sh5.15 billion recorded in 2023.
The non-liability claims paid on the other hand rose sharply by 19 per cent to 2,237,479 claims equivalent to Sh20.58billion from Sh17.59 billion in a similar period last year.
Long-term insurers paid 116,981 claims amounting to Sh20.66 billion in Q1 2024 increasing by 9.5 percent in terms of number but decreasing by 0.4 percent in terms of amounts from 106,822 claims and Sh20.73 billion respectively paid in Q4 2023.
The number of general liability claims closed as no claims decreased by 74.0 per cent from 5,891 to 1,530 while the amounts decreased by 57.2 per cent from Sh821.05 million to Sh351.55 million.
The number of non-liability claims closed as no Claims Payment Statistics for Q1 2024 claims decreased by 63.0 per cent from 16,043 to 5,941 while the amounts increased by 8.3 per cent from Sh1.92 billion to Sh2.08 billion.