By Dhahabu Writer
Kenya’s second largest medical underwriter AAR Insurance has today made the first medical insurance cash back payout for un-utilized outpatient cover.
The company has presented 37 employees of Alexander Forbes with cash back payout amounts of between Sh5,000 to Sh165, 000 each on the un-utilized portion of their outpatient cover for the past three years. The clients collectively received a total of Sh1.9million.
Dubbed ‘AAR Proactiv’, the product will see policyholders receive 12.5 percent of total premium paid in cash at the end of each year they insure with AAR if they do not exhaust the entire outpatient cover. The product was introduced at Alexander Forbes in 2013 as part of a pilot phrase ahead of formal launch last year. It has so far attracted over 10,000 customers with the company aiming to get over 200,000 by December 2017.
“AAR Proactive seeks to empower our clients to cost-effectively manage their outpatient spends with a cash back reward in the event they do not utilize their outpatient limit,”
said Caroline Munene, AAR Insurance Kenya Managing Director.
“With a cash back reward, we hope our customers will take charge of their medical insurance policy by reducing unnecessary doctor visits as is the case especially towards end of the year when people rush to exhaust un-utilized premiums,” she added.
Ms Munene further said the product will help curb fraud in the industry by eliminating collusion between medical providers and policy holders who will now be keen to save money. It is also expected that policy holders will now be keener on scrutinizing their bills as well as on querying procedures and tests prescribed by doctors.
Through the product, AAR insurance is also seeking to encourage Kenyans to take control of their health as a critical step in reducing the financial burden particularly attributable to increased cases of non-communicable diseases (NCDs).
Rising incidences of NCDs have seen a surge in medical claims in the recent past. According to data by the Association of Kenya Insurers (AKI), insurance companies paid a total of Sh20 billion to settle medical claims in 2014. AAR Insurance paid over Sh2 billion in such outpatient claims in 2014. Last year, the company paid Sh2.5billion.
Medical claims linked to NCDs are expected to rise in coming years unless decisive action is taken to encourage Kenyans to proactively manage their health.
Last month, AAR Insurance announced 84 percent rise in profits boosted by growth in revenue, cost of containment and enhanced quality of its underwriting business. Profit after tax rose to Sh.285 million in 2015 compared to Sh149 million the previous year. Similarly, profit before tax increased by 84 per cent from Sh223 million in 2014 to Sh410 million in 2015.