i ISSUE NO. 3625 

June 21 - 27, 2013


 Coastweek   Kenya

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'Biometrics' launch will curb
medical insurance fraud

Fraudsters have often used weak identifications
systems to impersonate real clients and steal
millions of dollars from insurers

NAIROBI (Xinhua) -- Kenya’s insurance penetration rate could increase following a raft of innovations by the sector.

One of the biggest challenges facing the industry and especially, the medical insurance sub sect or has been rampant fraud caused by lack of clear identification systems.

Criminal networks have exploited loopholes to circumvent the security measures that have been deployed.

According to the Insurance Regulatory Authority, the overall insurance penetration in Kenya reached 3.1 percent by the end of 2012. This compares unfavorably with advanced economies where at least 20 percent of the population is covered.

But medical insurance is even lower at 1.75 percent of the population. Stakeholders have blamed the low uptake on high cost of premiums, in an environment where a large segment of the population is relatively poor.

Currently, a few people are covered at high cost but for the industry to thrive it needs a model where more people are insured at a lower cost.

A new innovation that leverages on Information Communication and Technology could lead to an increased penetration, as it helps to curb fraudulent medical claims.

The internet based system uses a biometric identification system that identifies the user.

Fraudsters have often used weak identifications systems to impersonate real clients and steal millions of dollars from insurers.

The system has developed an easy to use solution in the management of medical schemes. The developer, Siltech Systems, said that the software links the doctors, insurance into one seamless interface.

Chief Executive Officer James Wainaina said that the tool relies on the client’s finger print which is unique to every individual.

“The system then interrogates the database in real time to know the extent to which the patient is covered, as well as the limit provided,” he said.

“In the case, where a patient who is covered by an employer leaves office, membership can be deactivated immediately through the click of a button,” he said.

The system is cost effective and could lead to a reduction of premiums charged by insurance companies. “Hospitals and insurance firms only have to pay a monthly access fee in order to use the system,” Wainaina said.

Medical Insurance Providers Association of Kenya (MIPAK) Chairman Samuel Agutu said that smart card solutions that are currently in the market are not compatible with each other.

“Each medical insurer has developed its own smart card and this has necessitated hospitals to maintain multiple systems,” Agutu said.

He added that the paper based system has a lot of inefficiencies as manual authorization is required before patients can access healthcare.

“This has been a challenge especially when the person authorizing cannot be reached,” he said. The innovation eliminates the need for end of month reconciliations, which the system carries out in a real time basis.

“This reduces backlogs, which delays settlement of claims and in the process makes the sector more efficient,” he said.

Insurance Regulatory Authority Chief Executive Officer Sammy Makove said that the industry is suffering heavy losses as a result of fraudulent claims. “We are therefore encouraging the sector to embrace technology that will enhance the sector,” he said.

Siltech Head of Insurance Ben Waweru said that low healthcare uptake has a negative impact on the economy. He noted that the solution offers timely identification of clients by making all parameters accessible instantaneously.

It also eliminates errors that could lead to over expenditures and this saves the underwriter from incurring losses. The system has also been designed to cater for cases when internet connection fails.

“We have an arrangement with the telecoms to offer a SMS platform to take advantage of Kenya’s high mobile penetration rate, “ Waweru said. The locally developed solution can be modified to meet the needs of even the remotest villages.

Siltech Designer John Mutuma said that the software also reduces the tendencies of doctors to collude with patients in order to defraud the insurance company.

“It has a built in alert that notifies the underwriters in case of any abnormal fees,” he said.


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