Insurance companies turned down more than Sh658 million in claims in the first three months of 2025, as fraud detection measures continue to reshape the industry’s compensation landscape.

A total of 22,364 claims were rejected between January and March, reflecting a 77.6 percent increase in the value of declined claims compared to the same period in 2024.

The latest report from the Insurance Regulatory Authority (IRA) shows that insurers declined 56 general liability claims amounting to Sh43.8 million, 22,086 non-liability claims worth Sh412.9 million, and 222 claims from long-term insurance providers valued at Sh202.2 million.

“These are claims that the insurer has declined to pay during the quarter for various reasons as per policy document or otherwise,” stated the IRA in its quarterly performance review.

The rise in claim rejections comes as insurers invest heavily in technology to combat fraudulent reporting. Companies are adopting advanced tools, including Artificial Intelligence, to vet and verify claims more effectively.

Jubilee Holdings, one of the major players in the industry, said it blocked fake claims worth Sh400 million in 2024. The company credited the success to enhanced use of AI-powered verification systems, which helped flag more cases—representing a 286 percent increase from the previous year.

Jubilee added that 16 of the cases were escalated to the Insurance Fraud Investigations Unit under the Directorate of Criminal Investigations. Others were handled internally through staff disciplinary action, claim refusals, and tighter risk evaluation.

Insurance fraud remains a major concern, with estimates suggesting that up to 20 percent of all claims are false. Motor insurance continues to be the most targeted area, where policyholders submit claims for staged or fictitious accidents, or register multiple covers for the same vehicle.

Some motorists have also been found using their insured vehicles for activities not covered in their policies, exposing themselves to risks not accounted for by insurers.

During the same period, insurance companies paid out Sh53.24 billion in total claims. General liability accounted for Sh5.51 billion, non-liability claims took up Sh19.87 billion, while Sh27.86 billion was paid out by long-term insurers.

This total payout represented a 22.7 percent increase from the Sh43.4 billion paid during the first quarter of 2024.