Nairobi — The insurance sector has lost Sh324.7 million in the last eleven months through fraudulent claims.
According to the latest report by the Insurance Fraud Investigation Unit (IFIU) this represents a 215 percent rise from Sh102.7million in the same period in 2014.
This year alone the unit recorded 93 insurance related fraud cases From January 1 to November 20, with the highest number coming from the insurance agents, at 21 cases.
“Theft by Agents cases were observed to have been perpetrated by both General Life and Life Insurance Agents. The agents are alleged to have been entrusted with premiums by the policy holders but failed to remit the same to the insurance companies,” unit’s Head Bridget Kanyai.
Fraudulent Motor Accident claims followed with 17 cases recorded and close to Sh50 million lost. Fake medical claims also remained high followed by theft by insurance employees.
On Monday 11 suspects appeared in court to take plea. This is after they were found with a bunch of fake stamps including hospital stamps, police and even that of the high court; fake police documents, cooked medical records where they use them to get drugs for resale of get motor claims for ghost accidents.
“There is one mastermind whose work is to sell drugs. As you can see here we got these stamps in a room somewhere,” she said displaying them to the media, “What he does is to make fake medical cards, medical reports like this one from Aga Khan hospital, and will go and get drugs from a pharmacy using this person’s details on a fake card. Now this lady you see on this card exists but does not know that she is being used to make someone rich. As you can see this guy even has a booklet where he gets the details of this unsuspecting Kenyan. The details are stolen from either insurance company or hospitals,” Kanyai, who is also a Senior Superintendent of the Police said.
Insurance Regulatory Authority (IRA) CEO Sammy Makove says some of the challenges experienced in dealing with insurance fraud include detection of the fraud itself, sharing information about fraud, lack of data sharing amongst insurance firms and lack of public awareness.
Others are companies fearing to investigate as well as inadequate use of data analytics.
“As we come to the close of the year which is also an active time in the insurance market place, we urge members of the public to exercise caution as they renew their policies. They should pay their monies directly to the insurance companies or intermediaries and get receipts for any payments,” Makove urged.
To deal with policy holders defaulters on the other hand, Makove said all insurance companies will soon be under the Credit Reference Bureau(CRB) just like the banks.
Since the establishment of the Insurance Fraud Investigation Unit, three years ago, 392 fraud cases have been recorded.