ANOTHER insurance firm is in the red financially and under close scrutiny by the Insurance Regulatory Authority for poor claims payment record, our investigations have revealed.
Both IRA and the Association of Kenya Insurers have acknowledged receiving complaints over Concord Insurance's failure to service various clients effectively by making on time claims payments.
"The firm is doing badly which is weird because it is not like it deals with the matatu sector which is usually the one that drives most insurers to ruin," said an industry source who sought anonymity.
A broker who deals with the firm told the Star that one of his clients had his vehicle impounded outside Nairobi at a garage due to Concord's failure to process payment.
Efforts by the Star to get Concord's side of the story in this matter were fruitless as our phone calls and emails to the firm's head office in Nairobi did not yield any response from the management. The Star has been waiting for Concord's response for three weeks.
" About Concord, interventions are usually at different levels - with the Statutory Management being the last option. We are engaging with this company to ensure that they get back to their feet," said a IRA in an email reply sent end September, the time when the Star had begun compiling this information.
Indications that all has not been well for the last few years at Concord are evident in the financial statements of the firm contained in the annual industry report by the Association of Kenya Insurers.
And last month when the IRA released the half year results for the industry, only Concord was missing from the list of licensed insurers whose consolidated financial reports were used in compiling the report.
Under IRA guidelines each company is required to periodically avail its financial statements to the regulator for perusal.
Last year Concord made a loss of Sh10.4 million according to information contained in the AKI industry report for that year. Gross premium written by the firm has been dropping since 2009. It stood at 675,174 in 2009, 472,866 in 2010 and dropped further to 181,839 last year; the AKI report shows.
Its market share has also shrunk from 1.57 per cent in 2009 to 0.30 per cent in 2011.
Concord's percentage growth has consequently also taken a hit as a result of its financial woes dropping 0.94 per cent in 2009, -29.96 per cent in 2010 and -61.55 per cent in 2011.
"The problem with Concord is management: unlike other insurers who have been in this situation where there problem was PSV (public service vehicle) related, Concord's problem stems from controversies involving the two shareholders not agreeing on many things," said another industry source who also sought anonymity due to sensitivity of the matter.
'The company has not grown for the last two to three years because premiums are not growing and claims are still there. Therefore it means that it has to meet incoming and old claims using mainly the old premiums collected and this has been stretched thin," said the source.