A car is towed away from an accident scene in Kigali. In 2015, insurers conducted a fraud risk assessment as it was slightly higher than the regional average of 21 per cent. FILE PHOTO | NMG
What you need to know:
According to a survey by Deloitte, motor and medical business classes are among the most loss-making businesses and therefore, insurers should investigate other emerging business classes that have a potential for growth to diversify their business mix.
As a result, the rising costs of fraud presents insurers with the challenge of being unable to adequately price risks, leading to deteriorated returns to equity.
It is estimated that fraud accounts for about 25 per cent and 33 per cent of the total cost of insurance premiums in Kenya and Tanzania respectively.
