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CIC Insurance General Manager Medical Division Dr Edward Rukwaro speaks to Capital Business on Insurance challenges/CFM


4 major threats to medical insurance business in Kenya

CIC Insurance General Manager Medical Division Dr Edward Rukwaro speaks to Capital Business on Insurance challenges/CFM

CIC Insurance General Manager Medical Division Dr Edward Rukwaro speaks to Capital Business on Insurance challenges/CFM

NAIROBI, Kenya, Apr 23 – The medical insurance business is the fastest growing in terms of premiums by at least four times in the last six years in Kenya.

Last year the whole industry closed at just over Sh20 billion worth of medical premiums.

But the challenge is profitability with three quarters of the insurance firms making losses.

CIC Insurance General Manager Medical Division Dr Edward Rukwaro, speaks to Capital FM Business on four major challenges facing the medical insurance business which if not address will continue to eat into the profits despite growth in revenues.

Poor pricing of medical products

If you look at the pricing of the products we have, they are priced in such a way that there is a price undercutting in the market. So in spite of the fact that we know what a reasonable cost of a product everybody – as we try to compete – prices lower. This is an unfortunate situation because we can control this if we want as an industry.

Medical cover not a priority by a majority of Kenyans

We are also caught up in a situation where many people don’t see insurance in general as a necessity. They still see it a luxury thing. After you have sorted out everything else; your housing, your car; that is when you think ‘now maybe I need an insurance cover’. Again, unlike many other things in life, people are still not averse to contributing for you when you have a medical problem. You remember the days of Harambee for weddings, school; nowadays many people don’t entertain. But on medical issues, they still are and may continue to help, for the foreseeable future. So there is still the problem of the need for one to invest in medical insurance is not so dire because you can still fall back to your extended family and friends to contribute.


On fraud, that is a place where we are really hurting. Anywhere between 20 to 40 percent of the claims we are paying are fraudulent. And fraud can occur from various perspectives. It could be the provider perpetrating fraud, it could be the clients or it could be a combination of both. An example would be, maybe I am a customer of an insurance company and my cousin requires medical treatment which he is not covered for yet I will go and ask the doctor to treat him on my cover. That would be fraud because my cousin is not entitled to this cover. These and many others types of fraud is really hurting us.

High cost of health care

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When we talk about high cost of medical care, obviously that has gone up with inflation. Also because of increase in life threatening diseases like cancer among other reasons. Anyone would tell you that lately diagnostic capability are higher because of technology which is a good thing. But technology comes with a higher cost. So yes the quality of care is improving but it comes with a cost which is not being factored in.

Dr Rukwaro says for these and other threats to be dealt with, there was need for development of new policies by the government adding that despite a majority of insurance firms making loses, medical insurance segment may be hard to ignore.

Some of the suggestions include, making it a mandatory for all Kenyans to have a medical cover like it is in the motor, tougher penalties for fraudsters, heavy investments health care by government as well as awareness creation on the importance of having an insurance cover in general.


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