International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue VII, July 2020 | ISSN 2454–6186

Factors Affecting Insurance Claims Payments in Kenya: A Case Study of ‘‘A’’ Assurance Company Limited

Dr. John Cheluget (MUA), Benstein Mutinda Kitaka (MUA)
The Management University of Africa, Kenya

Abstract: Most of the insurance companies in Kenya are faced with challenges which affect claims payments and this explains why some insurance companies are placed under statutory management. For the case of ‘‘A’’ Assurance Company Limited the organization was placed under statutory in the year 2008 due to challenges of claims payments, this made customers to have a negative perception of the company due to previous experience they had. The main objective of the study was to determine factors affecting insurance claims payments in Kenya with specific objectives to determine how type of cover affect insurance claims at ‘‘A’’ Assurance Company Limited; to establish how underwriting affect insurance claims at ‘‘A’’ Assurance Company Limited; to determine how insurable interest affect insurance claims at ‘‘A’’ Assurance Company Limited and to determine how insurance pay-out affect insurance claims at ‘‘A’’ Assurance Company Limited. The study is anchored on expectancy theory and goal setting theory. This study adopted a descriptive research design with a target population of 120 employees at ‘‘A’’ Assurance Company Limited. Stratified proportionate sampling was used to get a suitable representative of the target population. This research study used questionnaires as the main data collection tool. The questionnaires were pilot tested before being administered to the target audience. Analysis of data was done using descriptive statistics. Specifically, means, averages and percentages were used in the study. The study established that type of cover affect insurance claims to a very great extent. The findings also show that underwriting claims has significant and positive influence on insurance claims. The study also found out that insurable interest affects insurance claims to a great extent and finally insurance pay-out influences insurance claims at ‘‘A’’ Assurance Company Limited to a great extent. The study concludes that the process of claims management has to strike the balance between customer expectations and maintaining cost efficiency. The client expectation is to be paid without delays while the claims managers have to ascertain whether the claim is payable and the amounts are correct.

Keywords: Association of Kenya Insurers, Insurance Institute of Kenya, Road Traffic Act, Insurance Regulatory Authority, Insurable Interest, Insurance Pay-Out, Insurance Cover, Underwriting