Your CFO just sent you the Q3 health benefits report. Claims are up 23% year-over- year. Your wellness program, with millions invested, has a 6% participation rate. And there’s a line item that makes you wince: KSh 8 million in suspected fraudulent claims. Again.
You’re not alone.
Across Kenya, the same story is playing out in boardrooms, HR departments, and insurance company offices. Kenya spends over half a trillion shillings every year on healthcare. Yet most of that money goes toward treating sickness, not preventing it. We’ve built a health system that’s world-class at documenting illness, but not at keeping people healthy. It’s great at paperwork, weak at engagement. That single design flaw turns small, solvable risks into big, expensive claims. And it’s bleeding everyone dry.
The Numbers Don’t Lie
Kenya spends over KSh 580 billion on health each year, based on the 2022 World Bank estimate that current health expenditure was 4.33% of GDP (Central Bank nominal GDP for 2022: KSh 13.49 trillion). This includes roughly KSh 150 billion that households spend out of pocket every year, exposing families to financial risk even when they have some insurance coverage.
Only 25–30% of Kenyans have any form of health insurance, meaning most people seek care late when it’s costlier and outcomes are worse. A high percentage of members exhaust their coverage within six to eight months of the policy period.
The result? Over 70% of medical insurers have sustained underwriting losses for more than five consecutive years. The medical insurance sector posted a loss ratio of 76% in the most recent quarter, with 13 of 18 firms offering medical covers operating at a loss. This isn’t sustainable. This isn’t insurance. This is a system in crisis.
The Employer’s Dilemma
If you’re an HR or benefits manager, you’re caught in an impossible bind. Healthcare costs keep rising – up 3.3% in the past year alone. You’ve done the best you can within the budget you have, but employees keep exhausting their cover.
You’ve thrown in a few token wellness talks and check-ups. Team-building exercises now count as “wellness.” For large corporates with unlimited budgets, you’ve gone further to offer comprehensive health benefits, investing in wellness programs, providing gym subsidies, mental health resources, and preventive screenings.
On paper, your benefits package looks great. But here’s what’s actually happening:
• Over 70% of health covers get exhausted before the year ends, forcing employees to pay out of pocket.
• Your wellness program sits largely unused and most companies see single-digit participation rates.
• Employees don’t understand what benefits they have until they need them.
• Many companies are turning to self-funded schemes because traditional insurance has become too expensive.
And the worst part? You have no way to measure if any of it is working. Are employees healthier? Are you preventing expensive claims? Is there any ROI on your multi-million- shilling wellness investment? You’re flying blind spending millions, and hoping for the best.
The Payer’s Nightmare
If you’re running a health insurance company, you’re watching your bottom line like a hawk.
Medical underwriting losses have ballooned, from KSh 3.72 billion in Q4 2022 to KSh 4.96 billion in Q4 2023. Claims come in faster than premiums. Fraud is rampant. And you have almost no tools to prevent any of it.
Here’s the brutal reality: by the time you see a claim, it’s too late. Someone is already sick. Someone is already in the hospital. Someone has already racked up KSh 500,000 in treatment costs that could have been prevented with a KSh 5,000 intervention five years earlier.
You’re processing claims for diabetes complications in 45-year-olds who were pre- diabetic at 40, but nobody intervened. You’re paying for heart attacks in members whose hypertension was uncontrolled for a decade. You’re covering stroke rehabilitation for patients who never adhered to their medication.
The top 1% of patients account for 20% of all healthcare spending. The top 10% consume 63% of total costs. If you could identify these high-risk members early and intervene preventively, you could transform your loss ratio overnight.
But you can’t, because your current systems are built to process sickness, not prevent it.
The Member’s Frustration
If you’re an employee with health insurance, your experience probably looks like this: You were informed by HR that you’ve been onboarded onto a medical scheme. You get an insurance card you throw in a drawer. You vaguely know you have some coverage, but you’re not sure what’s included until you’re sick and need it.
When you do need care:
- Hospital visits involve long queues, guesswork, and back-and-forth approvals.
- Pre-authorization is a mysterious black box that sometimes says yes, sometimes no.
- Your benefits run out mid-year, and you’re suddenly paying KSh 80,000 out of pocket for a procedure you thought was covered.
You know that wellness and prevention could save you from this frustration, but where do you start? If you’re lucky to have a good employer or insurer, you may have access to screenings or gym subsidies. But you’ve never actually used them. You’re busy. You don’t know how to sign up. Nobody’s ever explained why you should care.
What Needs to Change
This isn’t about bigger limits or more product variants. It’s about activation.
The future of health benefits must focus on:
- Identifying rising risk early
- Pre-authorizing prevention
- Sustained engagement through nudges and micro-incentives
- Measure what matters: participation, completion, risk-score shifts, avoidable-claims proxies, not just wellness talks, team-building, and sporadic check-ups.
What Kenya needs is a health engagement platform — a system that unites payers, employers, and members to act before illness strikes. A system that drives measurable participation and real outcomes.
Not more paperwork. Not more claims.
More health.
In my next article, I shed some insight into why most Kenyan households are one medical incident away from the auctioneer’s hammer and the engagement plays that build real financial resilience.