AAR Insurance, Kenya’s second largest health insurance provider with 13.65 per cent market share, suffered a loss of KSh626 million from its medical insurance business in 2018. This is according to unaudited accounts published on the Q4 Insurance Industry Report.
AAR’s health insurance gross premiums amounted to KSh5.5 billion and the company paid KSh3.2 billion in medical claims.
The firm’s Incurred Claims Ratio for the medical insurance segment stood at 77.5 percent, implying that for every KSh100 premium received, AAR paid KSh77.5 in claims. Incurred Claims Ratio shows an insurer’s ability to pay claims. It may also indicate an insurer’s inability to detect fraud resulting in high claims payment.
Medical Insurance is the company’s main business although it provides insurance covers for fire accidents, personal accidents, work-related accidents, among others.
Most health insurance providers in Kenya also incurred losses which amounted to KSh1.1 billion for the entire industry. Some analysts attribute the huge amount of losses to fraudulent claims.
