Insurers must modernise claims process to curb fraud and delays

Most recent data from the Insurance Regulatory Authority (IRA) shows that in the last quarter of 2025, the insurance industry paid more than Sh80 billion in claims in just four months, highlighting the critical role it plays in supporting individuals and businesses in times of loss.

Within the same review period, the regulator recorded that 532 complaints were registered compared to 423 in Q2 2025. Of these, 82 percent were related to general insurance, while 18 percent were made against long-term insurers.

However, behind these numbers lies an industry operating in an increasingly complex environment, shaped by rising customer expectations, evolving risks, and operational pressures. Among these issues, two stand out: delayed claims and increased fraudulent activities, especially cyberfraud.

While the industry’s importance is clear from the scale of its payouts, the claims environment itself is becoming more demanding due to increased climate-related disasters, geopolitical disruptions affecting global supply chains, and the sharp rise in cyber incidents, among others.

All these continue to make claims more complex to assess and resolve. The industry must, therefore, acknowledge that these pressures are reshaping the landscape, creating an urgent need to rethink claims management.

Fraud remains one of the most persistent and expensive challenges. According to the Insurance Fraud Investigation Unit, 184 cases were recorded in 2024 and about 57 cases in Q3 of 2025. While these figures may appear insignificant, their impact is substantial, with fraud estimated to account for 10–15 percent of total claims costs in the motor and medical segments alone.

According to the Communications Authority of Kenya, at least 4.56 billion cyberthreats targeting local organisations were recorded in Q3 2025, a 441.27 percent rise.

These pressures are directly impacting how claims are handled, from assessment timelines to settlement speeds, and are forcing the industry to rethink traditional approaches to claims management.

Addressing these challenges requires more than incremental adjustments. It calls for a fundamental shift in how the industry operates and embraces emerging technologies such as artificial intelligence, predictive analytics, satellite imagery, and digital claims platforms to improve efficiency.

These technologies can help process claims faster, enhance fraud detection accuracy, and improve transparency for policyholders.

While this shift in mindset is already underway, as reflected in conversations at the recent Inaugural Minet Kenya Claims Conference 2026, there is a need for more platforms and greater involvement of industry leaders, innovators, and professionals to discuss the future of claims, customer-centric practices, and sustainable insurance solutions.

Claims management remains a people-centred function, often involving individuals and businesses recovering from loss. Therefore, this is not just a call for efficiency or an opportunity to reduce operational costs. It is a call to strengthen the industry and deliver on its core promise: providing timely, fair, and transparent support when it is needed most.

Today, paper is no longer a mandatory part of the claims process. The speed of settlement, ease of processing information, and simplicity of lodging and paying out claims are now of utmost importance.

Adopting AI-powered solutions, for instance, can automate key steps such as documentation, verification, and assessment, significantly reducing processing times from weeks to days or even hours.

For customers, this translates into quicker settlements and a smoother experience. For insurers, it means improved efficiency, better resource allocation, and stronger operational performance.

Equally important is AI’s role in fraud detection. By analysing large volumes of data, AI systems can identify patterns, anomalies, and inconsistencies that may not be immediately visible through traditional methods.

This allows insurers to flag suspicious claims earlier, reducing losses and ensuring that genuine claims are prioritised and paid promptly.

However, while AI brings powerful capabilities, it is not a replacement for human judgment. Claims management remains fundamentally people-centred, involving individuals and businesses at moments of loss and uncertainty. As Oromo noted, it is a function that requires empathy, fairness, and careful decision-making.

The most effective approach, therefore, is not to choose between technology and people, but to combine them. AI can handle data-intensive and repetitive tasks, while human professionals focus on complex cases, nuanced decision-making, and customer engagement.

Together, this creates a more balanced, responsive, and effective claims process.

The writer is Minet Associate General Manager, Risk Solutions. His email is [email protected]