A survey released by the Association of Kenya Insurers (AKI) on Wednesday, July 5, exposed three errors that cost Kenyans who have insured various properties.
In the survey on the state of microinsurance in Kenya, the association indicated that the errors made several property owners miss out on their claims despite encountering losses.
The Association of Kenya Insurers (AKI) argued that some policyholders were under-declaring property value. Most of the undervalued properties ended up missing out on compensation. Some properties listed included houses, land, motor vehicles and other business assets.
Besides undervaluation, the survey established that the change in property value during the policy cover tenure affected most holders seeking compensation.
Additionally, the survey revealed that some entrepreneurs partially insured their goods and other commodities. Such business people suffered losses during the compensation process, especially during calamities such as fires.
The Association of Kenya Insurers indicated that insurance companies only compensate policyholders commensurate to the insured goods.
Inaccurate updates also cost various property owners hence they end up losing their compensation. Despite the errors, the association indicated that the covers protect entrepreneurs from risks.
The association insisted that the covers helped various insured traders, including those who suffered losses after Gikomba and Toi Market fires. One of the victims in Toi Market, revealed that she suffered losses north of Ksh3 million.
“Micro insurance is a powerful tool that protects low-income individuals from financial risks and helps break the cycle of poverty”, Tom Gichuhi, AKI Executive Director, stated during the survey launch.
"For microinsurance to work, we need to partner with a wider variety of institutions including development partners, insuretechs and technology partners, the government and other business associations and aggregator groups such as SACCOs, churches and others. I am glad to note that the Microinsurance regulations allow for insurance distributors to be non-insurance players," he added.
Despite the errors, the association established that health insurance, personal accident, and last expense were the most popular microinsurance products demanded by consumers.
The survey engaged a wide variety of stakeholders, including insurers, potential and current customers, insurance intermediaries, development partners and insuretechs.
