Challenges in management of general Insurance claims in Kenya
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Date
2010-10Author
Kiana, Mercy Wairimu
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
General Insurance companies underwrite homogeneous policies. The product a customer
purchases from an insurer is peace of mind, based on the promise the insurer makes to
him that he will be compensated in the event of happening of the insured peril. Thus,
claims processing is a central service in an insurance company. The objective of this
study was to determine main challenges faced by General Insurance companies in claims
management.
The study adopted a survey research design where the population of interest entailed all
General Insurance Companies in Kenya. Data was collected through the use of a
structured questionnaire. Questions were both closed ended and open ended. The open
ended questions gave the respondents an opportunity to add more information which
could otherwise not be revealed through closed ended questions. The data collected was
arranged systematically and coded to facilitate analysis. The data was then analyzed
using descriptive statistics.
From the findings, weak underwriting standards form the highest challenge in
management of General Insurance claims in Kenya. At the same time, there is a high
level of fraud in the Kenyan General Insurance Industry. It is clear that claims
departments are more likely to find it necessary to investigate a claim when
circumstances of accident are unclear and when vehicle is not valued prior to
commencement of cover. Claimant advocates and agents/brokers are the ones highly
used to perpetrate fraud. Moreover, delay in reporting a claim and high work load of
staff were the main factors found to contribute to delay in claim payment.
The study recommends that policy makers in the insurance industry, including the
Insurance Regulatory Authority (IRA) as well as the Association of Kenya Insurers
(AKI) should formulate and put into force policies that would effectively reduce or even
completely eliminate weak underwriting standards. At the same time policies should be
formulated to ensure that proper procedures are followed at inception of cover. It is
especially important to enforce valuation of motor vehicles prior to commencement of
cover, to reduce the need to investigate claims which may later arise. Other
recommendations the study makes are creation of a police unit to deal with insurance
fraud and special courts to handle fraud-related charges. It is also recommended that the
insurance industry lobbies for implementation of structured compensation for both motor
injury and work injury claims.
Citation
MBA Thesis 2012Sponsorhip
University of NairobiPublisher
School of Business, University of Nairobi
Description
Master Thesis