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EDITORIAL: Regulator must streamline insurance sector

The country has 57 licensed insurance companies and hundreds of brokers and agents

In Summary

• The insurance sector, if well run, will cushion millions of Kenyans from unforeseen circumstances.

• IRA must restore faith in the sector in order to attract more clients and make Kenyans see insurance as an essential service in their day to day lives.

IRA chief executive Godfrey Kiptum with Equity Group CEO James Mwangi during the issuance of a licence allowing the Group to run an insurance business /HANDOUT
IRA chief executive Godfrey Kiptum with Equity Group CEO James Mwangi during the issuance of a licence allowing the Group to run an insurance business /HANDOUT

The number of complaints against insurance firms is in the rise.

There is an increase in the number of claims being dishonoured, be it for life, motor or medical.

Insurers blame this on a rise in fraudulent claims that are plunging them into losses, especially in the motor and medical segments yet it is insiders perpetrating this.

The Insurance Regulatory Authority received 1,637 complains in 2020. This ranged from delayed settlements, declined claims, erroneous deductions  and unsatisfactory offers or compensations.

The regulator has since penalised eight insurers a total of Sh17.7 million but what happens to the aggrieved parties?

The country has 57 licensed insurance companies and hundreds of  brokers and agents.

Among them, there are genuine players but some are not operating in good faith but seem simply to be out to make quick money from gullible customers.

Almost every sector or individual needs one type of insurance or the other but many shy away due to the mistrust rising from the many insurance firms that have collapsed with clients' money.

The insurance sector, if well run, will cushion millions of Kenyans from unforeseen circumstances.

The sector has a huge untapped potential but uptake rate remains very low. Insurance penetration, which is the ratio of gross direct insurance premiums to GDP, declined to 2.17 per cent in 2020 from 2.34 per cent in 2019.

IRA must restore faith in the sector in order to attract more clients and make Kenyans see insurance as an essential service in their day to day lives.