Motor vehicle insurance tops fraud cases in Kenya - IRA report
In the first half of 2025 alone, the Insurance Fraud Investigation Unit (IFIU) received 85 reports of fraudulent claims, 45 of which involved motor insurance.
At least 971 cases of insurance fraud have been reported in Kenya over the past five years, with motor vehicle insurance emerging as the most targeted sector.
A report by the Insurance Regulatory Authority (IRA) shows that scams in the industry include fake accident claims, forged insurance certificates, falsified theft reports and fabricated medical bills.
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In the first half of 2025 alone, the Insurance Fraud Investigation Unit (IFIU) received 85 reports of fraudulent claims, 45 of which involved motor insurance.
Other common schemes involve theft by insurance agents, false medical claims and the addition of non-members to health insurance plans. The report notes that the prevalence of these fraudulent practices has strained insurers’ resources, forcing higher premiums for customers.
While the number of reported cases decreased by 15.6 per cent in 2024 to 184 from 215 in 2023, the overall trend over five years indicates a persistent challenge. Historical IFIU data shows 150 cases in 2022, 124 in 2021, 130 in 2020 and 83 in 2019.
In response, IRA has implemented a range of anti-fraud measures. These include digital verification of motor certificates, enhanced monitoring of insurance agents, training for police officers on fraud detection and public awareness campaigns.
The regulator’s latest figures for the second quarter of 2025 (March–June) show 423 complaints registered, with 78.7 per cent relating to general insurance and 21.3 per cent to long-term insurance. Of these, only 259 complaints had been resolved. Complaints are reported through multiple channels, including post, email, toll-free lines, walk-ins and social media platforms such as X and Facebook.
IRA has also introduced stricter rules for anti-money laundering (AML) and counter-terrorism financing (CFT) compliance. Insurers are now required to conduct independent annual reviews of their AML/CFT programmes, particularly in high-risk areas such as politically exposed persons, cross-border transactions and complex investment-linked products.
The reviews, which must be submitted to IRA by January 31 each year, will assess technical compliance with the law, the effectiveness of controls and institutions’ execution of customer due diligence, record-keeping, staff training, suspicious transaction reporting and outsourced compliance arrangements. Boards of directors will be held accountable for approving remedial actions and ensuring timely fixes.
IRA Chief Executive Godfrey Kiptum emphasised the importance of the reviews in a circular to insurers.
“The objective of the review is to evaluate the adequacy and effectiveness of these measures and ascertain compliance with the law. Note that you are required to conduct the independent review and submit the report with comments from the board no later than January 31 of every year,” he said.
Long-term insurance products, which allow cooling-off periods, top-ups and surrenders, are particularly vulnerable to exploitation by launderers. Criminals can register, make payments, cancel contracts or make multiple top-ups, disguising illicit funds as legitimate insurance transactions.
The regulator’s crackdown comes as Kenya remains under pressure following its grey-listing by the Financial Action Task Force (FATF) in February 2024.
The global watchdog cited weaknesses in the country’s financial oversight, prompting authorities to strengthen compliance measures and prevent insurance policies from being used as channels for illicit finance.
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