Companies
Thursday February 09 2023
The UAP-Old Mutual Tower in Nairobi. PHOTO | COURTESY
Insurance crime detectives attached to the Insurance Regulatory Authority (IRA) have arrested a man for receiving Sh600,000 from UAP Old Mutual Insurance after he allegedly faked the deaths of three of his relatives.
The detectives say Philip Odero Kauma logged a false insurance claim with UAP Old Mutual, purporting that the three beneficiaries he had insured had passed on and received the payment between July 2, 2021 and November 19, 2021.
Mr Kauma’s payment, which has since been flagged as fictitious, came in the year the insurance industry’s fraudulent claims hit Sh463.15 million—the highest since IRA started making public the figure.
The value of uncovered fraud in Kenya’s insurance industry was Sh327.79 million in 2020, Sh386.3 million in 2019 and Sh310.49 million in 2018. IRA is yet to make public the figure for last year.
UAP Old Mutual forensic manager Simon Mwangi had reported to IRA’s Insurance Fraud Investigation Unit (IFIU) that Mr Kauma obtained the money by pretending that the beneficiaries of the said policy—Veronica Anyango Odero, Benedetta Makanda Kauma and Serephine Anyango Juma—had died.
“Investigations were carried out and it was found out that the alleged deceased were alive. Today (Thursday), officers from IFIU mounted an operation and managed to arrest one Philip Odero Kauma,” said IFU.
“He has been booked in at Central Police Station Mombasa vide OB 119 /8/2/2022. He will be charged before Chief Magistrate Court Mombasa tomorrow with three counts of obtaining money by false pretence.”
The investigative unit was set up in 2011 to deal with fraud cases in the insurance industry even as insurers work on upgrading their processes and controls to plug gaps that allow fraudulent claims.
Insurance fraud is a menace to the sector because it reduces insurers’ profitability and inconveniences genuine customers since insurers are forced into a lengthy process of vetting claims to curb incidents.
IRA’s industry report for three months ended September last year showed the industry had 38 fraud cases reported to the IFIU.
The Association of Kenya Insurers is mulling technology use such as blockchain from onboarding to claims processing to help lock out fraudulent claims.
Read: Medical insurers plan joint tech platform to curb fraud
Blockchain is being touted to help cut paperwork, validate documents from customers and provide permanent audit trails that can be used to identify claims.
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