Motor Insurance Fraud is a Huge Challenge for Insurers

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One in every five insurance claims made is fraudulent, according to the Insurance Regulatory Authority (IRA). Some fraud cases involve individuals who have taken loans to buy cars and fake accidents to get funds to pay the loans, to those who take private covers for public service vehicles. Motor assessors and garages also collude to commit fraud, with others, selling vehicles across the border and on the pretense that they have been stolen, worsening an already bad situation.

The Insurance Regulatory Authority (IRA) has urged Kenyans to desist from making fraudulent insurance claims as the practice was hurting the economy, keeping premiums high and slowing down claims settlement pace.

The regulator has indicated that the malpractices that include false motor accident (injury) claims, stealing by agents, conspiracy to defraud and fraudulent motor theft claims are inflating insurance premiums in Kenya by up to 30 per cent and this is based on reported cases only, meaning that it could be much higher. Players in the sector have been decrying huge losses associated with fake claims, especially in general insurance (motor insurance and medical insurance).

In an effort to develop capacity for insurance companies’ teams to detect and prevent motor insurance fraud, the Insurance Institute of East Africa held a Motor Insurance Fraud workshop on 15th-16th, February,2024 at Fairmont, The Norfolk, Nairobi. The workshop was aimed at building capacity, and in specific equipping the delegates with skills to identify fraud, gain best practises and mitigate its impact. Delegates were drawn from a numbers of insurance industry underwriters and comprised of the following teams: –

  • Business Development teams
  • Underwriters
  • Claims
  • Investigators


At the end of the workshop, the Insurance Institute of East Africa (IIEA) recommended the following: –

  • Need for regular fraud trainings/workshops across the entire work force either internal or external.
  • Need to consider establishment of fully-fledged risk management control function if not present.
  • Need to prioritizing management team on matters frauds, how to mitigate and very important their big role in making sure that a fraud risk strategy gain success at the organization.