Implication Of Fraud On The Competitiveness Of Insurance Companies In Kenya
Abstract
This study sought to assess the implications of fraud on the competitiveness of
insurance companies in Kenya: a census study of insurance companies in Kenya. This
is for the reason that for decades now, the insurance industry in Kenya has been
grappling the threat of fraud which greatly eats into the revenue income and to the
extreme, into their profit margin. According to IRA about 40% of total claims paid in
the year 2015 equivalent of Kshs. 324 Million were fraudulent claims. For instance, in
the Past years the country witnessed the collapse of well established insurance
companies as a result of fraud. This study sought to investigate the Implication of
fraud on competitiveness of insurance companies in Kenya. The study adopted a
census survey study across the 55 Insurance Companies registered by the Insurance
Regulatory Authority as at February 2017.The study obtained primary data from
interviews from all the 55 registered insurance companies in Kenya as at 2017.
Primary data was collected with the aid of a questionnaire sent to respondent by drop
and pick method. The study findings established that fraud has various implications
on Kenyan insurance companies including: Increased cost of doing business, direct
impact on premium rates, staff turnover due to summary dismissal, closure, huge
claim reserve ratios. The study recommends several measures in the fight against
insurance fraud as a threat competitiveness as follow: companies to regularly review
the laid down policies on fraud as fraud advances in forms and thus there is need for
continuous training and research. Also, the government through IRA to ensure that
public awareness programmes on the implication of fraud are rolled out in the whole
country.
Publisher
University of Nairobi
Subject
Insurance Companies In KenyaRights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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