Kenya’s insurance industry is facing growing fraud risks alongside rising claims, with cases reported to the Insurance Fraud Investigation Unit (IFIU) increasing by nearly 49% in the first quarter of 2026, according to data from the Insurance Regulatory Authority (IRA).
The number of fraud cases reported between January and March rose to 52, up from 35 cases during the corresponding period in 2025. The increase was largely linked to insider theft and increasingly sophisticated fraud networks.
The rise in fraudulent activity came as insurers recorded higher claim payouts across general insurance, life insurance and microinsurance segments.
General insurance claims increased by 9.5%, reaching KSh28.26 billion in Q1 2026 from KSh25.80 billion a year earlier. Medical and motor insurance accounted for the bulk of these claims, representing 86.7% of total general insurance claims.
Life insurance payouts also increased, with benefits paid to policyholders rising 5% year-on-year to KSh32.45 billion, compared with KSh30.92 billion in Q1 2025.
Microinsurance recorded the sharpest increase in claims. Incurred claims more than doubled, rising 121.9% from KSh116.92 million in Q1 2025 to KSh259.47 million in Q1 2026. The surge pushed the sector’s loss ratio to 56.5%.
The IRA data also points to a change in the nature of insurance fraud, with internal schemes increasingly replacing traditional document-related scams.
Cases involving insurance intermediaries diverting customers’ premiums jumped from just two cases in Q1 2025 to 17 cases in the first quarter of 2026. Fraud involving insurance company employees also emerged, with three cases of staff theft recorded in Q1 2026 compared with none during the same period last year.
Also Read: KCB, Mastercard Partner to Digitise Payments for 30,000 Dairy Farmers
Other forms of fraud, including bad cheques and conspiracy-related schemes, increased significantly from no reported cases in Q1 2025 to 18 cases in Q1 2026. Forgery cases also rose from three to five.
However, several conventional insurance scams declined during the period. Fake motor vehicle insurance certificates fell from eight cases to zero, while fraudulent motor accident, theft and injury claims dropped from seven to five.
Cases involving double registration declined from three to one, while impersonation cases fell from two to one.
Authorities have taken action against some of those suspected of involvement in insurance fraud, with cases brought before courts in Nairobi, Mombasa, Kwale, Nyeri and Shanzu.
