Jan 25, 2015

National Health Insurance on Your Mobile Phone

on 24.01.2013

The National Health Insurance Fund (NHIF) has announced that registration and payment for their medical cover package will soon be accessible through mobile phones. According to the country’s official medical cover provider, Kenyans will no longer have to jump through red-taped hoops whilst doing the back-flip and singing the Kenya National anthem in Japanese, in order to sort out their medical expenses. NHIF’s move comes hot on the heels of Britam’s Linda Jamii mobile phone health insurance product which was launched late last year.

How It Works

The system will allow potential Fund contributors to register for the Fund using their mobile phones. The only thing that must be done manually is visiting the organisation’s offices to collect the NHIF card.

Image source: eurweb.com

The system will allow existing members to pay monthly contributions through all of the four mobile money service providers.

Currently, anyone wanting to register for the health insurance scheme is expected to fill in a form which can be found at their headquarters or on the Fund’s official website.

NHIF registers any adult from both the formal and informal sectors. For those in the formal sector, membership is compulsory. For those in the informal sector (including retirees), membership is open and voluntary.

Contributions from formal sector employees are deducted and remitted to the Fund by their employers. This is done by Cheque or through electronic banking. These contributions are made based on their income.

Voluntary contributors pay KES 160 per month (KES.1920 per annum).


Some of the benefits of registering with NHIF (both physically and digitally) include an in-patient cover for the contributor, declared spouse and their children and in-patient services in private and high-cost hospitals on a co-payment basis.

The Fund provides a comprehensive medical cover which extends to over 400 accredited government facilities across the country. It also comes with a comprehensive maternity and Caesarean package which is available in government hospitals, several mission hospitals and some private hospitals.

A cover with NHIF includes dialysis at the Kenyatta National Hospital as well as the Moi Teaching & Referral Hospital at a rebate. What’s more, the Fund has a family planning cover which includes procedures such as Vasectomies and Tubal Ligation.

Perhaps one of the biggest perks of the cover is the fact that, when it comes to treatment, NHIF does not exclude any disease.

NHIF plans to start setting up the framework for Mobile Revenue Collection Payments as well as a Registration Platform as soon as it secures some developers by February 12th, 2013.

CIC Insurance Can Now Manage Your Pension Funds

on 23.01.2013

The Retirement Benefits Authority (RBA) has licensed CIC Asset Management Limited, a subsidiary of CIC Insurance Group Ltd, to manage pension funds. CIC Asset Management Managing Director, Mr. Preter Mwaura told the media during the CIC Insurance Group Independent Insurance Agents Awards in Nairobi that company will leverage partnerships with co-operatives and chamas across the country to grow the business.

Responding to the high number of concerns that most pension funds are mismanaged, CIC have said that they will make use of Information and Communication Technology (ICT) to reduce the cost of doing business and enhance efficiency in management of pension funds. “We have established a sales force that will go to the market and look for pension schemes that are not being run professionally so that we can turn them into  funds that can generate more wealth to pensioners,” said Mr. Mwaura as quoted by KBC Business.

CIC Asset Management Ltd expects to gather KES 4 billion from its Unit Trust business in 2013, and has also revealed that they have already earned KES 2.4 billion within the first year since they were licensed, which they will use to trade in unit trusts.

Why You Should Consider a Post-Election Violence Insurance Cover

on 18.01.2013

Kenyans have been waiting with bated breath for this year’s general election and insurance companies have seen it as an opportunity to make some profit. No one wishes it, but if 2007’s tragic debacle is anything to live by, then tens of thousands (if not hundreds) need riot insurance.

Looking back at the devastating events that culminated in the wake of the 2007 post-election crisis, some insurers have seen fit to offer a package that may not have been so popular before. UAP, Jubilee Insurance, Heritage and APA are just some of the companies with a Political Risk cover package.

According to the Africa Trade Insurance Agency (ATI), the likelihood of chaos unfolding during this year’s March 4 General Election has prompted local businesses to take up insurance against what is termed as Political Risk. The Agency reports that the uptake of Political Risk packages has gone up 3,000 per cent from KES 1.3 billion in 2008 to KES 41 billion by December of 2012. The growing uptake has even encouraged the Association of Kenya Insurers (AKI) to form a collection of 20 local insurance firms to help manage the situation.

“There is a growing increase in demand for Political Risk covers,” said ATI Senior Marketing Officer Souvik Banerjea. Speaking during a press conference earlier this week, he noted that premiums are expected to go up this year.

Political Risk insurance covers damages caused by politically-incited violence, nationalisation of businesses as well as foreign exchange controls that are associated with regime change.

Image source: trinityafer.com

According to one of the local dailies, Banks are said to be insuring loans, discounted invoices and letters of credit offered to businesses to a tune of about KES 4.5 billion. The paper reports that Banks were among the most affected after some of their clients were unable to repay loans after their businesses were destroyed during the wake of the 2007/2008 post-election crisis. It looks like those who fail to learn from history are doomed to repeat it. Those that take a leaf from its book will definitely be prepared.

Insurance Goes County-Wide

on 16.01.2013

The Kenya Government has made plans to set up insurance agencies across all the 47 Counties. According to the Insurance Regulatory Authority (IRA), the government has already taken a bold step towards making insurance available in more parts of the country, beginning at a County level.

The initiative involves educating at least 100 people per County with regard to insurance packages and details about the industry that would otherwise remain undisclosed.

In spite of an ongoing move to ban 33% of the registered insurance companies who have failed to meet IRA regulational standards, the government still intends to sensitize the general public.

This IRA programme, which was first launched in Kitui late last year, has since managed to educate 105 participants, granting them a Certificate of Proficiency in Insurance. Present during the graduation ceremony were the likes of big insurers like Britam, CFC Life, Heritage Insurance and Pan Africa Life.

There are currently 45 registered insurance firms and all of them are stationed in Nairobi. The Kitui Acting District Commissioner evennotes that most underwriting agents are only found in urban areas while the rural population remains uneducated. The Chairman for the Chamber of Commerce, Kiprono Kittony, agrees, stating that the new agents will be tasked with helping local businesses understand the growing need for insurance.

The next training period is set to kick off in the course of this month in Kisii County.

What Will You Do if the Government Shuts Down Your Insurance Company?

on 14.01.2013

33% of registered insurance companies are at risk of getting shut down because they have failed to meet a specified set of requirements. According to the Insurance Regulatory Authority (IRA), 15 out of 45 of the country’s registered insurers have failed to meet some regulatory conditions which include shareholder limits and maintaining the financial stability of their organisation.

Some of these companies have also failed to ensure integrity among their Directors and Executives.

The IRA announced that only 30 out of the registered 45 insurance companies have renewed their licenses. 9 have not even been cleared by the Institute of Certified Public Secretaries of Kenya (ICPSK), a branch of the government tasked with promoting the good governance, administration and management for the sake of competent development within various organisations.

Insurance regulations state that individuals can only own up to 25% of a company’s stake. Anyone with more than 10% is supposed to be monitored by the IRA. The regulator may force these big fish to sell off their stake if they are found to have broken any of the aforementioned protocols.

Insurance law limits individual ownership to a maximum of 25 per cent stake and gives the regulator powers to monitor activities of shareholders controlling more than 10 per cent of the insurers who can now be forced to sell their stake should they be found guilty of fraud and other malpractices.

What does this mean for consumers?

The IRA reports that only 7% of Kenyans have any kind of insurance. This amounts to about 40 million uninsured Kenyans. But what does the possible shut down mean for the remaining 3 million? What would happen to you, as a client, if your insurance company is shut down?

Well, according to Pesatalk sources from CFC Life and Heritage Insurance, this means that consumers will just have to pick up the pieces and move on. Speaking during a recent exchange, sources reported that the shutdown would mean that your policy could be terminated.

Will you lose your investment?

When you put all your eggs in one basket, you risk losing them all in some unforeseen accident. So what happens when your insurer goes belly up? Do you risk losing your investment? Yes and no. While your time with the insurance company may be over CfC and Heritage Insurance sources argue that consumers have nothing to worry about. Instead of losing all your money like you would in an ill-fated pyramid scheme, insurance companies tend to have fail-safe procedures.

Image source: financialjesus.com

While losing clients may not bode well for the company, insurers are bound by AKI (Association of Kenya Insurance) regulations which obligate them to pay back their customers in the event of such a crisis.

If your insurer gets shut down, you don’t actually lose your premiums. The company gives you what is known as a “Surrender Value”. This is basically a particular amount of money which is based on the contract you signed before getting an insurance package. The value varies depending on the insurer and the terms of the contract. This value is calculated up until the time when your contract is terminated.

Can your premiums be carried over to another insurance company?

No, they can’t. Heritage sources note that the provisions for each insurance company are different. This means that the terms of a contract from one company cannot be carried over to another organisation. As stated above, you can only receive the Surrender Value and use your accumulated funds to apply for a new and more secure policy.

Will you get all your money back?

If your insurer gets the boot, you will get some if not all of your accumulated earnings. If your term is cut short by the proposed shutdown, your service provider will give you an amount that is based on their policies and the contract you signed upon joining that particular organisation.

No one jokes about the money that they are entitled to. Those that do may be stark raving mad. In which case, insurers make promises that they are contractually obligated to deliver.

Even with a potential shutdown looming over the horizon, your contract will save you from going home empty handed. So you had better read the fine print because the IRA has given offenders up until the 1st of March, 2013 to comply. Until then, the IRA has  encouraged industry players to be more open about their dealings.

Why You Need Travel Insurance

on 24.12.2012

It’s 24th of December, everyone, and their poodle, is travelling somewhere today. Make sure you don’t forget to insure. As much as comprehensive insurance covers cater for most situations, there are some packages that do not offer protection in case of accidents outside the country.

Getting insurance outside of the country is next to impossible if your trip is only temporary. There are many things that tourists and other travelers have to account for. They include major medical insurance, emergency evacuation, liability insurance, lost property covers, motor vehicle insurance, flight insurance and life insurance among others.

Major medical insurance caters for accidents and illnesses that may require professional care from a doctor, a physician or basically anyone within the medical fraternity. According to Immihelp, an immigration information resource center, in some parts of the UK, a medical checkup can cost up to KES 12,000.

Advantages of Travel Insurance

Emergency evacuation covers cases where Kenyan nationals need to exit a country due to reasons of internal conflict like civil war, riots and other forms of unrest. Liability insurance caters for third party accidents and incidences in a foreign country where the insured may be held responsible for damages.

Lost property insurance ensures that you are compensated in case you lose items of value during your trip. Motor insurance applies to vehicles you may rent or buy and use when you are out of the country. Life insurance is still active even if the policy holder dies abroad as long as the cause of death is natural or accidental (unless the insurance provider explicitly states otherwise).

Flight insurance is a cover that also comes into play when a tour operator experiences financial problems therby compromising your holiday. In a foreign country, the situation can only get worse. This kind of thing can be avoided by booking trips with ATOL (Air Travel Orgernisers’ Licencing), ABTA (Association of British Travel Agents)  and IATA (Intentional Air Travel Association) approved companies like Discovery Travel.

Insurers like AAR have a cover that extends to destinations such as Uganda and Tanzania, including Kenya. Their basic Afya Maisha cover is only in Kenya. However, their Bronze Card Plan covers emergency rescue and evacuation within Eastern Africa.

Their Silver and Gold Card Plans have the same benefits as the Bronze Plan but also includes worldwide emergency services during the first 45 days of absence from Eastern Africa in any membership year.  With these packages, North America is limited to 50% of each benefit limit.

The Silver Plan has a cover limit of KES 6 million for accident hospitalisation and KES 2 million for illness hospitalisation.

For a Gold Plan, the cover limit for both accident and illness hospitalisation is KES 10 million each. The personal accident cover limit for adults is KES 1 million and KES 500,000 for children.

Some firms like GA Insurance(formerly General Accident Insurance) offer accident covers for tourists and visitors travelling abroad. The UK based insurer was incorporated locally in 1979 and has had a presence in Kenya ever since.

Image source: http://cdn.madamenoire.com

Other firms like Pacific Prime specifically offer covers for Kenyans working, living or going on holiday abroad. The insurer also continues to provide the medical cover if the policy holder decides to make their stay abroad permanent. Their policies are renewable for life and globally portable, so even if you choose to relocate away from the country your plan will continue to cover you.

UAP Insurance has a medical cover that caters for emergency evacuation within East Africa. It also caters for medical treatment abroad provided that the condition cannot be treated locally.

Travel Insurance through The Heritage Insurance Travel Policy provides 24-hour emergency and medical assistance anywhere in the world. It caters for flight cancellation, medical expenses and a hospitalization allowance.

For motor vehicle insurance abroad, you may have to subscribe to a foreign service during the duration of your visit. This kind of insurance is required whenever you rent a vehicle. It is temporary and premiums are based on the motor vehicle leasing company that you choose.

Going on holiday can be dangerous. There are always risks involved, especially when it comes to visiting unfamiliar destinations. The Handbook for Medical Care and Insurance therefore urges travelers to take precautions before embarking on any international journeys.

New Low-Cost Medical Insurance at the Touch of a Button

on 28.11.2012

Kenyans will soon have access to more affordable healthcare as Britam, in conjunction with Safaricom and Changamka, launches a new medical insurance product that can be managed using a mobile phone. The three companies have officially unveiled Linda Jamii, a medical insurance package which allows users to access health care as soon as their premiums hit KES 6000.

“Linda Jamii is a timely product at a time when cancer, diabetes and other potentially expensive illnesses are on the rise,” said Safaricom CEO Bob Collymore in a written statement. “It is worrying that more than 35 million Kenyans are still not able to access timely and quality healthcare because most insurance products are designed to suit high income earners,” he added.

In order to target a lower income bracket, the product will have an annual premium of KES 12,000 per family. After the first deposit is paid, families will have up to six months to pay the difference.

“Linda Jamii will have an inpatient cover of KES 200,000,” said Britam Managing Director, Steven Wandera. He noted that it would provide an outpatient cover of KES 50,000 per family, per annum. it will also come with a maternity cover and a hospitalization income replacement benefit of KES 500 per day to take care of lost income while in hospital. Speaking during the product’s launch ceremony at the Fairmont Hotel in Nairobi, he mentioned that health services would be offered through leading public and mission hospitals.

How to Register

The registration process only takes a few minutes. By simply dialing *525#, you can top up your account at any time. The service only requires the ID numbers of the subscriber and their spouse, their date of birth, their place of residence and the name of their nearest health center. Applicants will receive a Linda Jamii card with a unique registration number.

To sweeten the deal, Safaricom allows users to top up other peoples accounts as well. What’s more, the product allows policy holders to cover their spouses and their children. All you need is an M-Pesa account and a national ID Card.

For those who cannot afford to pay for the product in one lump sum, Linda Jamii allows users to save their money through incremental M-Pesa deposits until they can reach a minimum premium of KES 6000. After that, they have six months with which to clear the difference and make it to KES 12,000.

“Linda Jamii has distributors in supermarkets that will ‘force’ healthcare into your shopping basket,” said Changamka CEO, Samuel Agutu. He mentioned that Uchumi Supermarkets had already partnered with the three organisations in a bid to promote the service.

Agutu noted that Changamka had installed an end to end internet based electronic platform hosted on the Safaricom cloud. The system has the capacity to manage more than 100 million insurance policies.

The product comes at a time when the insurance sector is at a concerning penetration rate of 3%. Despite this small margin, the sector appears to be growing.

Earlier this month, the Authority reported that the insurance industry’s premiums, assets, investments and share holder funds all recorded a growth between January and June 2012. Underwritten premiums during this period increased 23.7% to KES 55 billion from KES 44 billion.

According to the Insurance Regulatory Authority’s (IRA) quarterly unaudited returns submitted by the insurance companies, the total value of the industry assets during the period under review hit KES 272.3 billion up from KES 232.3 billion.

This was attributed to the growing understanding and appreciation of the importance of insurance among members of the public. This is also coupled with enhanced consumer education activities being conducted by both the  IRA and other industry players.

On the other hand, Linda Jamii is still in its pilot phase. The three will release it in Nairobi throughout the remaining course of this year before branching out to all the Counties across Kenya. They hope that the expansion process will kick off in January 2013.

New Jobs as IRA Pushes for Public Awareness in the Insurance Sector

on 27.11.2012

The Insurance Regulatory Authority (IRA) is looking for new employees as part of an ongoing initiative aimed at promoting national development and public awareness within the sector.

According to a statement from CEO and Commissioner of Insurance, Sammy Makove, the Authority is looking for resource persons to upscale their consumer education agenda. The IRA will expect them to conduct these activities across the Counties.

The move follows the second phase of the Authority’s campaign, which involved the unofficial recruitment of religious leaders. The first phase involved government lobbying aimed at encouraging transparency within the sector. The IRA has since decided to enforce Section 5 of the Insurance Act which gives them the power to ensure growth and development within the industry.

For this particular task, however, the Authority is looking for people with substantive knowledge and understanding in the field of insurance. The IRA has also put an emphasis on candidates from the Financial Sector. Speaking to Pesatalk during a recent exchange, Authority officials encouraged all the relevant parties to apply. However, they were reluctant to say how many positions were available.

They mentioned that applicants with a degree in insurance, risk management, finance, law or any business-related field will be at an advantage. Those within the field of medicine and engineering have also been encouraged to vie for a post. They will be expected to work as short term consultants for the insurance sector.

Application closes on Tuesday the 11th of December, 2012.

Are You Ready to Pay 15% More For Medical Care?

on 21.11.2012

The average cost of a medical visit is expected to rise 15% in January. According to a discussion involving Resolution Health CEO, Peter Nduati, the Aga Khan University hospital has already issued a notice of a 10% increase in medical expenses. Other institutions like the Kenyatta National Hospital (KNH) and the Mater Hospital are already planning to hike costs.

Speaking to pesatalk during an interview, Ministry of Health officials were reluctant to reveal the finer details of this claim.

“We will know in the course of this year,” said one official, who has since chosen to remain anonymous.

The Proof is in the Pudding

Nduati, however, noted that hospitals have sent notices to increase their charges. He mentioned that both public and private institutions would hike their charges by at least 15%, noting that Aga Khan and Nairobi Hospital’s expenses would be steeper.

In turn, the Kenya Private Health Providers Consortium (PHP), an association of private hospitals, says consumers should expect an increase in the cost of healthcare as the service providers move to raise the revenues they need to match doctors’ salaries in the public service. This was shortly before the doctor’s strike that was later resolved on October 4th, 2012.

A report from Medical Kenya even states that the cost of private healthcare alone has been rising since 2010. “While every effort has been made to rationalise costs, the adverse economic realities have compelled us to adjust our prices upwards by an average of 15.5 per cent on all our services,” said Aga Khan Chief Finance Officer, Galeb Gulam. Speaking to health insurance providers earlier this year, Gulam warned the public to prepare for tougher times ahead.

Seeking Treatment Abroad

“The consultation charges in these hospitals are high, with a 30% medical inflation rate,” said Nduati during a more recent exchange. “Due to the high prices and increased cases of cancer and cardiovascular diseases, we are discouraging patients from visiting some local hospitals and encouraging them to get treatment abroad.”

Medical Kenya has cited India as the preferred destination for major surgeries.

First world countries like Canada and the United States seem to have better healthcare policies than Kenya.

Canada has a system that prohibits the billing of patients covered by their Medicare Policy. Under what is known as the Canada Health Act, patients can receive treatment through a public social insurance system.

On the other hand, the US has what has come to be known as Obamacare. For those who don’t know what this is, Obamacare is the unofficial name for The Patient Protection and Affordable Care Act which was signed into law on March 23, 2010 in the US. The Act contains almost two thousand pages of reforms to the insurance industry and the health care industry in order to cut healthcare costs and to provide affordable health insurance to all Americans.

Low-Cost Insurance

Unfortunately for Kenyans, patients have to cope with the locally available resources. There have been some evidence of reforms and strides have been slow but steady. All things considered, insurance companies have been rolling out low-cost health insurance schemes to meet the needs of the public.

From CIC to Eagle Africa and UAP Insurance, service providers have been launching policies for low income earners across the country. There are some providers that charge as little as KES 7 a day for medical cover. However, the Ministry of Medical Services is still working to make these plans more feasible.

Over the past 5 years, the entire industry has reported a growth of no less than 16% per annum. Currently, premiums for the insurance companies by the end of the first half of 2012 amounted to KES 55.03 billion. This represented an increase of 23.7% from KES 44.48 billion last year.

The Association of Kenya Insurers even projects that consumers will have paid premiums worth KES 150 billion by 2015.

The government has also pushed for public awareness campaigns in a bid to encourage the uptake of insurance schemes across the country.

Last year, money spent on healthcare increased 14% to KES 167.4 billion from KES 146.7 billion in 2010.

The Kenya Pharmaceuticals and Healthcare Report (2012) states that rising inflation and an increase in the price of medicine and medical devices translated to a 10% to 40% rise in charges towards the end of last year. As a result, some of Kenya’s top hospitals have increased bed and consultation charges.

The discussion with Nduati revealed that an average visit to Aga Khan, Nairobi or Mater Hospital currently costs about KES 5000. A 15% increase would mean that Kenyans without insurance will pay KES 5750. Meanwhile, other charges like 6-week radiotherapy expenses could go up from KES 9000 in KNH to KES 10,350. The same treatment costs about KES 138,000 in a private hospital. Based on this argument, private charges for the procedure could rise to KES 158,700.

So with all these rising costs and so called affordable insurance schemes fighting for a seat on the operating table, are you ready to meet the expenses?

Insurance Regulator Calls for Public Awareness Campaign

on 18.11.2012

The Insurance Regulatory Authority (IRA) has stressed the need for consumer education within the insurance sector. According to the Authority, public awareness is something that requires their immediate attention. The IRA has now decided to roll out an intensive consumer education programme in a bid to sensitize the public on what the industry has to offer.

According to IRA Chief Executive, Sammy Makove, the public awareness campaign is a means of ensuring informed decision-making among consumers. He said that the move would enable consumers to choose insurance products and services that meet their specific needs.

Speaking during a forum in Nairobi on Thursday 15th November, 2012, Makove noted that the move was in line with the IRA’s long term strategy to build a stable insurance market.

The Authority reports that insurance penetration currently stands at 3.1% against a backdrop of 40 million uninsured Kenyans. As such, the IRA has identified religious leaders as crucial partners in increasing the uptake of insurance products and services across the country. Makove announced the initiative in the presence of local Bishops, Pastors, Reverends, Imams and Priests.

The move comes in line with the IRA’s mandate to support industry growth and development through consumer education as stipulated in Section 5 of the Insurance Act.

According to the Authority, it also comes at a time when the government recognizes the insurance sector as a critical anchor for the realization of the Vision 2030 goals.

“The world we live in is characterized by risks and uncertainty and Insurance has evolved as one of the most important ways to provide this security” said Makove. He added that insurance would also provide much-needed financial protection vital for economic development.

Makove believes that local religious leaders will play a vital role in unlocking the industry’s potential.