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Insurers who Delay Settlement of Claims to be Penalized - IRA - Kenyan Wallstreet The Insurance Regulatory Authority has proposed a plan to penalize all insurers who delay settling of claims after 90 days when all the documentation have been filed. In its new five-year strategic plan (2018-2022), the regulatory body noted that in order to protect the interest of the policy holder...

Insurers who Delay Settlement of Claims to be Penalized – IRA

 by Carolyne Tanui

March 5, 2019



The Insurance Regulatory Authority has proposed a plan to penalize all insurers who delay settling of claims after 90 days when all the documentation have been filed.

In its new five-year strategic plan (2018-2022), the regulatory body noted that in order to protect the interest of the policy holders and beneficiaries, it will Introduce interest for delayed payment on admitted claims.

This is aimed at curbing the low settlement ratio of claims which has been blamed on delayed tactics employed by insurers when claims are due.

“Champion treating customers fairly, ensure timely settlement of claims and enhancing information disclosure,” were listed as other strategies meant to boost consumer protection and education.

IRA CEO, Godfrey Kiptum also noted that the agency seeks to ensure consumer education activities are strengthened through dedicated public education and promoting Insurance awareness programmes i.e. insurance clinics, insurance champions, ASK shows, Road shows and open days.

In the report, IRA pointed out that the insurance sector has continued to register growth in gross written premiums rising from Kshs 109 billion in 2013 to Ksh 207 billion in 2017, with an average growth of 13% per annum.

“The insurance premium levy has grown from Kshs 1.2 billion in 2013 to Kshs 1.8 billion by end of 2016/17 FY.” part of the report stated

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Thinking Art “Art is the lie that enables us to realize the truth.” ~Pablo Picasso

What does yourself future look like?

Today:
• In your late 30's
• A wife and 3 schooling children
• An excellent financial shape
• A better job, but how long will it last?

Well, examine your real look at your future self!

The gap between your today and future self is INSURANCE!

Your financial choices today determine the financial options your future self will have.

Why most of Kenyans embrace the e-banking system.

Mobile banking (M-banking) is a service provided by banks and other financial institutions to their customers to help them conduct a range of financial transactions using mobile phones and a software app. It is composed of the user-who is the customer and the device basically the handsets. Mobile devices may include most mobile phones and tablets. The good news as always been that the platform works with almost all types of handsets inclusive of the most commonly referred to as 'mlika mwizi'. Mobile banking is a development before internet banking. Technology advancement aided the introduction of the Internet banking. Like the mobile banking, internet banking helped give the customer's anytime access to their bank accounts. Customers could get details on their accounts, download bank statements, fund transfer and pay their bills while at their homes and offices.

However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection. Mobile banking gives a remedy to this challenge.

Development of mobile banking apps has been embraced by most Kenyans with all kinds of smart phones. Different financial institutions may have an app defined distinctly e.g M-pesa for Safaricom and an Mco-opcash app for Co-operative Bank. Mobile banking is usually available on a 24-hour basis. However, not all accounts may be accessed through mobile banking and there may be a limit on the amount of money to be transacted. This limitation may entirely depend on the financial institution.

Mobile banking which is growing at a very high rate is good and big news to banks as millions of Kenyans already use mobile devices to do their banking transactions. Mobile phones as devices with high security standards and direct connections, allows customers to access a wide range of services.

Most Kenyans consider mobile accessibility to be one of the most important features when performing everyday banking tasks and choosing a banking provider. The overall availability and accessibility of mobile banking features now plays a crucial role in the decision making process when it comes to switching bank accounts. M-banking is now a core requirement for customers who demand accessibility to banking features via smartphones, tablets and a software app. The reality is that banks who can’t offer immediate mobile accessibility for their banking customers are falling behind the competition. For instance, Co-operative bank which is always at the forefront in incorporating this service to her systems is evidently one of the largest and strongest financial provider in the country. I joined the bank when the push for alternative banking especially mobile banking was at its peak. Since then, there has been a remarkable switch to this channel which is being embraced by at least 90% of customers I serve at my desk.

There a number of basic financial transactions that forms a basis for any customer. Customers need not to check into banking hall to access these services. This is a whole reduced load work to both banks and customers. These customers can now obtain account balances, pay bills, change pin, obtain a mini statement, monitor deposits, fund transfer between their accounts or another's accounts within the same or different bank accounts. There is an influx of customers flocking the banks requesting for bank accounts especially with the reduced borrowing rates. However, most of them can now download statements and print from there convenient locations

From the bank's point of view, mobile banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions. Transactions involving cash aren't handled using mobile banking, and a customer needs to visit an ATM or bank branch for cash withdrawals-for specific accounts or deposits.

A number of reasons have led to to a well established mobile banking platform as below;

Remedy for internet banking.

As said earlier, internet banking preceded mobile banking. The online banking dictates that customers must have an internet connection or WIFI coverage and a computer. This posts a big challenge in developing countries like Kenya. However, with mobile banking, the challenge is dissolved. You can find mobile connectivity in the remotest of places also where having an internet connection is a problem. This means it's risk free as compared to internet banking.

Ease of use and time convenience

Transition from traditional banking practices to a modern mobile banking system is a remarkable improvement. Initially, banking used to be a cumbersome experience that may only be attractive as a tale. Long before now, we had banking outlets at specific numbered towns- hardly five, to service the whole country. If a family was blessed to have a member in US, then this means wealthy in the family. A family member may get an international call to travel from say Turkana to Nairobi, commonly known as 'Kenya' by the community, to fetch twenty dollars from Barclays bank whose main retail outlet is in Nairobi and Mombasa. Travelling a very long distance to visit a bank to request for an account balance is not a good story to tell. Contrary to this, the mobile banking devices have enabled customers to perform high volatile transactions by tapping.

Ease of use has really created a clear distinction between the traditional and modern banking systems. You don't have to walk into a banking hall for some of the services even if the outlet is just at your doorstep. These services are accessed from anywhere and at any given time depending on the demand and customer's convenience.

Mobile banking through cell phone is user friendly. The procedure involved is very simple and time saving. A customer only follow the simple instructions to make the transaction. It also saves the record of any transactions made for a future reference as may be required. Ability to check balance status and withdraw cash whilst on the move is an essential feature that answers to customer's urgency. Depending on demand, customers make informed decisions at any given time without a process of going through the bank because the banking information is readily available at the touch of a button. The ease of use adds value for both customers and the banks.

Improved Security

At my bancassurance desk, I don't sell insurance but what insurance can do. One key feature I promise my clients is security and peace of mind.. Now, most customers are still at crossroads whether to cross over from traditional banking platform to a modern banking system. We are all at one time been caught in hardship. Behind these hardship stand something or rather someone who promises you light at the end of the tunnel even though the tunnel may seem to stretch to infinity. Like the immoral woman at the Jacob's well, people who have decided to make a simple move to mobile banking run up and down the streets preaching and confirming the light they have seen. Mobile banking simply means increased security and immediate accessibility. You don't move around to ATMs with security pins engulfed between folded palms to safeguard them against a next customer whose breathe is within your reach. Customers can now access mobile banking facilities at the touch of a button anytime at any place.

Mobile alerts is yet another key feature embraced by customer that boosts security. Banks incorporates this feature to customers' basket to create custom alerts and push notifications which enable customers to stay constantly connected in terms of understanding updates to their accounts and managing account performance. This in fact enables them to keep on vigilance of accounts related transactions in real-time which helps to quickly flag up potentially fraudulent activity. Many mobile banking providers provide push notification services that enable consumers to be notified as and whenever the account is active, helping them to w**d out fraudulent transactions on the move, at the touch of a button and before they even happen.

Accessibility

With the modern banking system, consumers now have the ability to access essential banking services and features whilst on the move using a mobile device. The accesss to there urgent and confidential financial information is instant and immediate. There is a wide pool of services that are enabled to this platform such as the ability receive balance updates notifications, transfer of funds to different accounts within a bank or other banks, pay bills, withdraw cash, prepaid recharge, all by tapping.

Mobile banking apps e.g the Co-op Bank mco-opcash is dependent on mobile internet. Secured internet connection in Kenya is widely provided by telephone service providers like Safaricom whose coverage extends to most remote and interior parts of Kenya. This dimsifies disparity between a Kenyan who is in Mandera and one in Nairobi in terms of mobile banking accessibilies.

The top Kenyan banks are striving to bring new customers on board and at the same time keep the existing ones through the provision of innovative and competitive mobile banking features that meets customers' specifications conveniently. Satisfaction keeps an already existing customer and most propably brings new customers on board. It's indeed a bank's business to be a head of a competitor in mobile banking accessibility.

Cost effective

Mobile banking as been a key player in the so called 'alternative channel migration'.

Banks are receiving an influx of customers who flock banking halls and cause traffic hence poor service delivery. With the advent of apps and mobile devices over the past decade, banks do not have the costs associated with running physical branches on the high density regions and are perfectly positioned to meet the needs and requirements of the customers. Most of the major banks possess mobile apps that enable customers to check their balances and access other banking services e.g the Co-op Bank Mco-opcash.

Reduced paperwork

Moving to mobile banking evidently efficient as it involves less or completely non paperwork especially when it involves bank statements. Bank statements and other essential documents clustered together at home and offices in paper forms can easily get misplaced, lost or get damaged. Switching to paperless enables consumers to feel confident and relaxed in the knowledge that crucial, highly personal banking data is stored safely in the cloud and immediately accessible electronically.

You can transfer money instantly to another account in the same bank using mobile banking. However, this is not limited to only transfer to other account with different banks.

The platform cuts down the costs of providing service to the customers. This new channel gives the bank ability to cross-sell their other products and services such as asset finance, mortgage, credit cards etc. Mobile banking is revolutionising the world of finance.

For service providers, it offers the next surest way to achieve growth. Service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones.

For the banks, the advent of and implementation of mobile banking is 'light at the end of the tunnel' and as quoted by the famous Bill Gates, 'Banking is necessary, banks are no'.

A marine policy will provide cover from warehouse to warehouse regardless of the mode of transport so long as there was transport by sea vessel at any one stage during the voyage.

Insurers seek generic drugs rules to cut medical cover costs

Insurers are pushing for rules that will require hospitals to prioritise dispensing generic drugs over branded medicines to patients as a strategy to tame the rising cost of medical cover.

The Association of Kenya Insurers (AKI), an industry lobby, is calling for a legal framework, which will ensure doctors do not prescribe the brand name, but only write down the chemical make-up of the drug.

AKI chairman Patrick Tumbo reckons that drugs make up about half or an average of 45 per cent of patients’ hospital bills, and the ratio is even higher in health facilities that dispense branded medicines.

“When the cost of healthcare goes up, we’re also forced to raise premiums. Generic drugs can be up to 80 per cent cheaper than branded drugs,” Mr Tumbo said in an interview with the Smart Company.

Underwriting loss

AKI wants Kenya to follow in the footsteps of India where Prime Minister Narendra Modi in April announced a new health policy, which compels doctors to prescribe generic medicines and only resort to branded ones in unique cases where there are no cheaper alternatives.

New drugs are normally developed under patent protection, but once that expires, other pharmaceutical firms are allowed to develop them in all chemical characteristics thus their cheapness.

Half of Kenya’s 20 insurance firms, which offer medical cover reported underwriting losses in this category in the period to December 2016, according to official data.

*Think insurance cos you won't be strong forever*

"I DETEST LIFE-INSURANCE AGENTS: THEY ALWAYS ARGUE THAT I SHALL SOMEDAY DIE, WHICH IS NOT SO."

Marine Insurance in Kenya....
Insurance firms in Kenya underwrites 10% of the marine cargo insurance.
About 90 per cent of cargo import insurance is currently handled by foreign firms with importers usually paying the premiums as part of a package (Cost, Insurance and Freight- CIF) to the exporter who handles the underwriting. This means our share is very minute.
We need a higher insurance pe*******on and a more profitable industry; the industry needs to capture these fleeing funds, retain them in our economy, improve its capacity to serve and of course pay more taxes. On average, the cost of insurance will be about 0.5 per cent of the value of the imports.
The requirement for local insurance is contained in Section 20 of the Insurance Act but has never been implemented due to compliance challenges.
Treasury CS Henry Rotich in his June 8 budget speech directed the Kenya Revenue Authority (KRA) and other stakeholders to fully implement the section to boost insurance business.
The implementation will be overseen by the KRA which will now demand importers show their insurance contract with a local firm before clearing goods.
Importers will have to produce proof of local insurance before their goods can be inspected at the source country.
Reviewing and implantation of marine insurance will be a big news to our economy...