Insurance firms are facing increased incidences of fraud on the back of adopting technology in their business, exposing them to a mismatch between risks and premiums charged. The latest financial sector stability report a product of Central Bank of Kenya (CBK), Insurance Regulatory Authority (IRA), Capital Markets Authority (CMA), Retirement Benefits Authority (RBA) and Sacco Societies Regulatory Authority (SASRA)—singles out technology as a weak link for The report titled ‘Sustained underwriters.
resilience multi-shocks environment’ says cybersecurity threats and insurance frauds have increased on growing use of digital channels and internet-enabled
devices, systems, and processes.
The report stresses that the “most significant” and emerging operational risk facing the financial sector is associated with the rapid adoption of financial technologies to power the delivery of financial products and services. “Underwriting insurance digitally may lead to risk-premium mismatch, exposing insurers to losses. Cyber security risks remain elevated following flexible home due to limited security working hours and working from in home set-ups or outside the office.”
