The Insurance and Regulatory Authority (IRA) has released a report which revealed that the level of insurance fraud in Kenya rose by 24% between 2018 and 2019.
According to the authority, insurance companies lost a total of Ksh 363 million, with false fire policy claims accounting for most of the lost money.
The trick was ranked the highest at 51.8%, accounting for Ksh 200 million forked out to individuals who intentionally burned down their cars, businesses and homes.
The government agency raised the alarm over such cases, noting that many of the fraudulent claims are reported by agents.
"Insurance fraud cripples the sector as it reduces the profitability of insurers and inconveniences genuine customers since insurers are forced into a lengthy process of vetting claims as a way of cutting Investment in the valuation report," IRA states.
Motor insurance fraud was second at Ksh 52.87 million, life insurance at Ksh 44 million and medical insurance at Ksh 42.5 million.
Those who employed fraudulent tactics in vehicle policies were reported to have resorted to forging insurance certificates, causing and reporting fake accidents as well as forging theft of motor vehicles.
In 2019, 83 fraud cases in vehicle policies were reported.
The Insurance Fraud Investigation Unit (IFIU) is keen on reducing the number of fraud cases and is cooperating with insurance companies to cut losses incurred by fraudsters.
IFIU spent Ksh 28.7 million to investigate fraud insurance cases in 2019.
In one recent case of life insurance, police questioned the motive behind the disappearance of a Thika businessman on Monday, September 21.
The businessman is alleged to have taken a life insurance cover with the said insurance company. The missing claims were reported to be fishy after the firm allegedly contacted his next of kin before the police could ascertain that he was indeed missing.
