Marine Insurance Fails To Impress As NHIF Introduces Biometric Identification

About a year ago, Kenyan importers were asked to ensure that they acquire local marine insurance as opposed to working with foreign firms as had been the case. The marine cargo insurance in Kenya is meant to protect the importers’ goods in case of damage during transit.

The idea was met with both excitement by underwriters, brokers and insurers in Kenya but with a lot of skepticism by importers.
The Kenya Revenue authority was also very excited with this new requirement and eyed the move as an opportunity to grow their revenue.
Importers were mostly worried about the financial muscle of local underwriters to handle big shipments and without settlement delays.

Much as the move by government to enforce this law was a great idea, its first year of enforcement has not been without its fair share of challenges.
Initially, there was a clamor with insurers fighting for market control. Then there was talk that part of the reason the move was not as successful as earlier anticipated was because the Kenya Revenue Authority was not keen to implement the new law and was instead focusing on short-term benefits.

Then there was the price wars between the underwriters since there was no clear cut rule in place to regulate the pricing.
At the beginning of the implementation process of the new directive at the beginning of 2017, the industry had hoped raise annual premiums of between Sh20 billion and Sh22 billion; all which used to go to foreign firms.
All said and done, the implementation was not a big success for the year 2017 with the industry attracting what a recent news report called abnormal low premium income achieving only 20 per cent of their 2017 annual premium target.
Moving forward, the Association of Kenya Insurers according to a news report in the dailies hopes to find out exactly why the industry has not performed as expected and what can be done to ensure it does.
Some of the areas that will receive scrutiny include the issue on if importers are heeding to the directive or just ignoring it, if there are cases of price undercutting among the service providers and if the long electioneering period in 2017 affected business.
The Insurance Regulatory Authority on the other hand is optimistic that despite the poor performance in 2017, things will get better adding that the experiences of the first year are just growing pains.
In other news on the insurance industry, the National Hospital Insurance Fund (NHIF) is finally adopting technology with an announcement that came last week.
The announcement by the Fund said that it plans on using biometric to identify its more than six million members countrywide who are enjoying the national health insurance in Kenya.
The move is geared towards not only catching with the era of technology but also as a way to discourage fraudsters.

The innovation that the Fund wants to take up is not untested. In 2015, NHIF started biometric registration for Civil Servants and security officers as a pilot and as preparation for what they are planning to do.
Once the registration process is complete NHIF members will be identified by placing their thumbs on a reader; something other insurers have already adopted.
It is a great idea because it will also make it convenient to access healthcare even when you lose your ID.
Recently NHIF asked all expectant mothers who hope to benefit from the government’s free maternity programme to ensure they are registered with the Fund.
This directive was however received with mixed reactions with some quarters saying it would lock out some expectant out of the much needed free maternity medical insurance services being offered by the government. Those against the idea said the services should be free regardless of if one is registered with the Fund or not.
Kenyatta National Hospital has already moved to implement this directive with news reports indicating that an internal memo at the referral hospital asked that all expectant women who show up to the hospital for free services without an NHIF card be directed to NHIF offices for registration.
Late last year President Uhuru Kenyatta gave a directive that would see all secondary school students (about 3 million) in the country registered under the Fund.
Though it is not clear what he hopes to achieve here; the directive was highly criticized by Kenyans who said it would make more sense to ensure that three million parents were covered because that would mean their children will also be covered.
The Fund has been making a raft of changes in a bid to ensure universal health care cover and though most of them have been criticized…for example when the Fund decided to slash the number of out-patient visits to just four in a year.
We shall keep a close eye on other changes that will most probably be introduced and hope that in the end the benefits will be to the everyday Kenyan.