Insurance industry settles Sh108m Covid-19 claims

The insurance industry says it has settled claims worth Sh108 million since March when the first case of Covid-19 was reported.

Out of the claims said to have been shouldered by 15 firms that provide cover for customers against the pandemic, only 45 totaling to Sh11.5 million had not been paid to private and public health service providers as at Wednesday.

The industry attributed the payment delays to the general slowdown of activities including invoicing, adding that there had been a decrease in the number of patients seeking treatment in hospitals.

Association of Kenya Insurers (AKI) Executive Director Tom Gichuhi said the claims are expected to increase as the pandemic persists, adding that the companies will review their policies based on the rate of infections in the country.

“This being a pandemic, it is not possible to predict the number of people who are likely to be infected and hospitalised going forward, and for how long the pandemic will persist,” Gichuhi told the Senate Ad-hoc Committee on Covid-19.

The committee chaired by Nairobi Senator Johnson Sakaja was told that the insurance industry is experiencing non-payment of monthly premium, lapsing policies, low renewals of short term covers and suppressed uptake of new policies.

Insurance firms are also seeing an increase in cancellation and non-renewal of group life business as well as increased winding up of retirement benefit schemes and contribution holidays.

AKI said the insurance penetration currently at 2.47 per cent is likely to drop even further.

On the position of insurance firms with regard to coverage of costs arising from testing, diagnosis and treatment of Covid-19, medical insurance firms are paying claims as per the terms and conditions of their respective policies.

For instance, a single case in a private hospital is estimated to cost between Sh600,000 and Sh1.2 million compared to public health facilities that charge Sh135,000.

Mr Gichuhi said insurance companies are paying for the testing and treatment of their policy holders in private and public hospitals.

To remain afloat in the market, some of the options the insurance industry is looking at include negotiating with private hospitals on affordable Covid-19 packages and to have a discussion with the government on sharing of treatment cost for testing of policy holders and admissions in hospital.

“We are monitoring the situation because a number of insurance companies are suffering and this could get to a point of being unable to service claims. The government should make available funds for insurance companies to borrow at a minimal interest,” he said.

Commissioner of Insurance Godfrey Kiptum said there were complaints by insurers on how some healthcare service providers are pricing items, saying there is need for the two to have a meeting and agree on manageable fees.

“There are complaints by insurers that private hospitals are charging personal protective equipment expensively and then passing the cost to the patients,” he said, adding that working from home has also affected payment of premiums.

This has also seen a number of people especially in tourism, transport and small and micro enterprises lack income to purchase insurance premiums since March.

Senator Sakaja said it was encouraging for insurance companies to agree to provide medical cover for Covid-19 patients but took issue with private hospitals, saying it was wrong for them to try and make profits from a pandemic.