Kenya insurance industry Covid-19
The industry is developing innovative products for frontline health care workers. [ Photo / Jones Day ]

The moment the World Health Organisation (WHO) declared COVID-19 a pandemic, it triggered a quick reaction by local insurers informing the insuring public that claims relating to pandemics were not covered whether expressly excluded in the policies or not.

It is a global practice to have pandemics as an exclusion in medical and other related insurance policies. This is simply because it is a devastating catastrophe whose spread and impact cannot be foretold.

Pricing risk

If we use the current pandemic as an example, when it first started in one province in China, it was initially considered an epidemic since it was in one region similar to the SARS and MERS epidemics of yesteryears. However, COVID-19 spread fast and spread globally, compelling the WHO to declare it a pandemic.

The world has not faced a pandemic of this nature and magnitude in over a century.

The health and social effects and the economic impact of COVID-19 have been unprecedented. Risk analysts could not have predicted and still cannot accurately predict how long and what further impact the virus will wreck. Since the losses cannot yet be assessed, as the pandemic persists, they, therefore, cannot be priced.

That said, the medical insurers in Kenya have been settling their customers Covid-related medical claims and as at the end of May 2020, they had paid out more than Ksh12 million in claims. Life insurance companies are honouring claims and have so far settled claims worth Ksh108 million. 

We continue to assess the situation to determine whether this is sustainable in the longer term. The industry is also in the process of developing innovative products for frontline health care workers.


One pioneer product has been developed by a consortium of three insurance companies. The product will offer a wide range of benefits including medical insurance, life insurance, disability and critical illness for the health care workers. The technical elements are being worked on before forwarding to the Insurance Regulatory Authority for approval soon.

Life insurance companies are honouring claims and have so far settled claims worth Ksh108 million. 

As an industry, we are complementing the efforts of the Government and Ministry of Health by adhering to the guidelines. Industry operations have been altered to adopt to the new normal. The pandemic has catalyzed our usage of technology to reach and serve customers and also run our businesses online. This may be the silver lining to this pandemic.

The world remains highly interconnected, and now that we are living through a pandemic, we are alive to the fact that it could happen again. This is an opportunity for the global insurance and reinsurance industry to develop products that could help the world deal with such risks.

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