The AKI Secretariat engaged Zamara (formerly Alexander Forbes) to undertake an actuarial determination of medical insurance rates in the country.

The study aimed to review the factors responsible for continued poor performance of medical insurance despite significant growth. The study also aimed to analyse industry data over a period of five years and prescribe ideal medical insurance premium rates and terms for both inpatient and outpatient packages.

The key highlights from the study indicate that the highest claims cost for inpatient are pregnancy related conditions and diseases of the respiratory system, while outpatient goes to both diseases of the respiratory and digestive systems. This is also reflected in the morbidity rates, where a spike is witnessed in children below 10, and adults between ages 25 and 45 due to respiratory diseases, and pregnancy related conditions respectively.

The average number of visits per claimant is one for inpatient and four for outpatient at an average cost of Ksh107,451 and Ksh5,177 respectively. A higher percentage of the inpatient cost is classified as ‘miscellaneous’, while that of outpatient goes to drugs.

The study recommends that there is need for stakeholder engagement between medical service providers, health care system regulators, underwriters and the insureds. There is much needed improvement of data standards through use of standardised codes, data capture of both premium and claims data, and use of data analytics to make informed decisions.

For the insureds, there is need for the underwriters to engage them in preventive exercises such as healthy eating and active lifestyles as opposed to curative measures. Underwriters should provide deterrents such as co-pay and incentives such as medical savings accounts.