alexa How 'dead' men fleece insurance firms of millions - Daily Nation

How 'dead' men fleece insurance firms of millions

Tuesday September 4 2018

More by this Author

When you lose someone you love, you gain an angel you know", goes a popular condolence message. But some Kenyans have found ingenious ways of gaining the “angel” without losing the person they love.

Insurance fraud investigators have uncovered a racket where people fake their deaths to get payouts from insurance companies.

And they use sophisticated techniques that can be unravelled only through thorough investigations by, and collaboration with, the investigative arms of the government.

The fraudsters mainly target life policy, group policy, and other policies with last expense as part of the package.

Although “fake death” claims are not as common as other types of insurance-related fraud, a death claim has higher returns (sometimes running into millions of shillings), compared with other claims. And that is what makes it so attractive to fraudsters.



Insurance is a highly competitive business, and companies strive to outdo each other. For instance, an insurance company might offer an investment policy but to entice clients, it includes the benefit of last expense, such that if the insured or a member of their nuclear family dies, the firm provides money for burial arrangements.

According to Mr Zakayo Mwangi, one of the pioneers of the Insurance Fraud Investigation Unit (IFIU) in 2011, and currently Group Senior Forensic Officer of UAP Old Mutual Group, in cases such as last expense, the beneficiary is required only to notify the insurer of the death through the nearest branch and produce a burial permit, plus a few other supporting documents that can be easily obtained even without proof of death.

For instance, a burial permit can be obtained from assistant chief, who might collude with the fraudster or issue one based on trust, without verifying the death.


Mr Mwangi added that fraudsters also take advantage of the fact that death is still treated solemnly, with great empathy extended to the bereaved.

Consequently, he says, “Their claims are processed quickly to alleviate further suffering. Once reported, money is paid almost immediately because it is to cater for the burial expenses.”

In a death claim, the insurer only needs to confirm whether at the time of the death the policy was active, whether the cause of death was covered by the policy and proof of death. To do this, insurers mostly check the authenticity of death certificate with the registrar of deaths.

However, investigations have found that some cartels take a policy and start paying the premium, Then, to make the death look genuine, they somehow acquire genuine documents as proof of "death".

“When you have seen the death and burial certificate and the issuing authority authenticating them, what will make you not pay that claim if the cause of death is covered by the policy? Sometimes it takes a forensic expert’s instinct to unravel the fraud, and this can only be achieved when investigators conduct thorough investigations,” said Mr Mwangi.


Some fraudsters claim a few thousands just to sort their money problems. For instance, on February 1, this year, Senior Principal Magistrate Martha Mutuku sentenced Joseph Wanjala Wanyonyi, 57, to two years' probation after he pleaded guilty to all the three counts of faking his son’s death in order to be paid Sh25,000 by Platinum Micro Insurance Brokers Ltd. He lodged the claim on November 21, last year.

And in Busia, a magistrate jailed a teacher for lying that his daughter had died so as to be paid last expense claims. The cause of death was indicated as a road accident, but when investigators visited the man's rural home, they found the girl alive.

But smart as the fraudsters might be, the problem with faking death is remaining dead.

“The claimants might say they buried the deceased in a cemetery, but there are instances the investigators got curious, especially where the deceased’s community is known to transport the remains of their departed prominent person(s) for a major funeral event back home,” Mr Maina says. 


Some fraudsters even replace the headstone on another person’s grave to deceive investigators.

Mr Kiplimo Kebenei, Jubilee Insurance Head of Security, says one successful fraudster managed to secure millions as compensation for death paid to his wife and was living a quiet life — until he ran into the agent who had sold him the policy.

“The agent, whose commission had been stopped because his client had "died", informed the insurer,” said Mr Kebenei.

The insurance industry has been forced to spring into action to fight fraud and avert further losses.

The insurance companies with fully fledged, fraud and investigation departments have informally joined hands to form the Security & Fraud Investigators Committee (SFIC), which began operations in 2017, and has already recorded encouraging progress. It brings together UAP Old Mutual Group, Jubilee insurance, Britam Insurance Company, CIC insurance group and AON Minet, among others.


Mr Kebenei, who is also the SFIC chairman, said they have held discussions and are following up with the Association of Kenya Insurers (AKI) to accept SFIC as a committee under AKI, to giving it teeth. 

“If they accept us, any rule we pass in fraud management will be adopted by all players in the industry,” he says.

Among the things they have establish is the extent of fraud a single individual can commit, thanks to   poor information sharing between insurers.

In life insurance cover, for instance, one individual who faked his death was paid Sh600,000 by one company, Sh650,000 by a second company and was almost paid Sh2 million by a third company, when the fraud was detected.


They have also identified similar fraud committed under general business, non-motor vehicle claims, and those committed by insurance agents.

SFIC members currently meet monthly to come up with ways of reducing fraud in the industry.

“We have been able to appreciate that we can compete in business but with fraud, there is no competition,” says Mr Kebenei.

SFIC lists its main survival pillars as: information and resource sharing; having a common database; having industry investigators; benchmarking; and having a common communication channel.