Insurance crime detectives attached to the Insurance Regulatory Authority (IRA) say they have uncovered an attempt by a Nairobi-based businessman to defraud Sanlam Insurance of Sh204 million through a false claim.
The detectives said Anthony Maina Kiama, 29, had logged a false insurance claim with Sanlam General Insurance purporting that his company, Afroplast Industries based in Thika, had lost its manufacturing machines in a fire incident last year.
“Investigations however established that this was a fraudulent claim, as the machines destroyed in a fire incident in Thika belonged to a different entity registered as Josmak Company Limited,” Insurance Fraud Investigation Unit (IFIU) detective Peter Ewoi said in a statement.
Mr Kiama’s case has been forwarded to the Office of the Director of Public Prosecutions (ODPP) with detectives keen on arraigning him once given the nod.
Reacting to the incident, Sanlam Kenya Group CEO Patrick Tumbo said the firm has enhanced its internal fraud management systems to guard against the growing cases of fraudulent claims.
“Fraud is an industry-wide problem that continues to reduce operational profit and erode shareholder returns and we appreciate the support from IFIU. We are now vetting claims lodged with us, more stringently to weed out unscrupulous ones,” said Mr Tumbo.
“Vetting is necessary though it may slightly lengthen the period leading to settlement, but we believe this is the price that we must pay to deal with fraud instances.”
IRA’s industry report for the first three months ended March 2019 show that Sanlam General had an underwriting loss of Sh15,160 during this period. Net earned premium income was Sh387,372 while claims incurred were Sh214,880.
The data further shows the industry had 30 fraud cases reported to the IFIU, with majority coming in March.
Some 27 cases were pending investigation, two were pending before the courts and one was pending arrest of known accused.
Many insurers have been working on upgrading processes and controls to plug gaps that allow fraudulent claims.