Drivers Of Motor Vehicle Insurance Fraud Risk: Empirical Evidence From Insurance Companies In Kenya

Abstract

Kenya has one of the fastest growing middle class populations in sub-Saharan Africa. Motor

insurance fraud is a serious risk in Kenya. This study sought to examine the influence of macro- economic factors, institutional factors and individual factors on motor insurance fraud risks in

among Insurance Companies in Kenya. The study was guided by Anomie theory, conflict theory and fraud management life cycle theory. The target population was all the 28 general business Insurance Companies based in Nairobi, from which 84 respondents were individuals at the claims management, risk management and motor assessment departments. Primary data was collected through a structured questionnaire. Based on the statistics, 80.1% of any change in fraud risks among motor insurance companies was explained macro-economic, individual, and institutional factors. Macro economic factors and individual factors were found to significantly. influence the motor insurance fraud risk while institutional factors did not have a statistically significant influence on fraud risks among insurance companies. During times of hard economic times, insurance companies should be more vigilant on claims and it is important for insurance companies to keep track of individuals with history of regular claims as the same was found to have a relationship with insurance fraud risks.