Business Daily Africa, July 27, 2010


By Daniel Asher

The insurance industry used to be a symbol of hope for consumers.

It was a monopoly of sincerity, while brokers and agents were flawless.

Insurance companies were reliable shoulders upon which consumers could lean.

These were the days when consumer was a king in the industry and was treated with all the dignity he deserves.

Detailed information regarding the insurance policies offered by various companies ranging from premium payments to claims applications was quickly availed and the compensation was prompt.

Few were the instances when a consumer had to involve himself with court battle in search for justice from insurance companies in Kenya.

The insurance companies were ready and took the initiative to educate their clients not only with the contents of Kenya insurance Act and the provisions of the policy but also with the “detailed” procedure of making claim for compensation before they could take the insurance cover and great was the general consumer confidence in the industry.

All these are no more in the contemporary insurance industry in Kenya.

Consumer is no longer the “King” but the servant of the profit motivated insurers.

They are compelled by circumstances to nervously take insurance policies in some cases only as a pre-condition for their operation like in the transport industry.

Many stories are told about how some of them insured one property or the other, feeling therefore, that the future of that property was secure.

Full disclosure

However, when misfortune did occur, the insurance companies burdened them with all sorts of red tape that made it almost impossible for the consumer to recoup their indemnity.

In cases of this nature, insurance companies bring out contracts “written in very tiny letters”, tucked away at the back of documents (clearly not intended for the understanding of consumers).

Getting compensation from the insurance companies has turned into a cat and mouse game where most often the insured is the loser due to the insurer’s economic strength as a result of accumulated consumers’ premiums which make them get the best representation in courts.

It is unfortunate that the consumer is being shortchanged in the face of the Kenya Insurance Act (1984) which was meant to give full protection to insurance consumers by ensuring adherence to policy contracts by companies.

Consumers must demand for full disclosure of all information related to each particular policy offered by any insurance company in Kenya.

The Insurance Regulatory Authority whose objective is to ensure effective administration, supervision, regulation and control of all insurance businesses in Kenya must ensure order and protection of the interests of insurance policy holders and insurance beneficiaries.

Asher is a Programme Officer, CUTS ARC, Nairobi.

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