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The East African : May 17th 2015
56 MAY 16-22,2015 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 4,980.71 -1.78% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,741.36 -0.84% USE All Share Index Uganda 1,918.00 -3.67% RSE All Share Index Rwanda 136.18 -0.29% JSE All Share Index South Africa 54,177.97 0.71% NGSE All Share Index 34,442.93 Nigeria 0.20% Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 Jan ‘15 Feb Mar Apr ‘15 rican Community member states could fall by as much as 18 per cent if fraud in the industry were eliminated. A survey by consultan- F≥aud keeps insu≥ance p≥emiums high in EA T he cost of insurance premiums in the East Af- cy firm KPMG shows that fraud accounts for 25 per cent of the total cost of insurance premiums in Kenya and 33 per cent in Tanzania. In Uganda and Rwanda, it accounts for 10 per cent and five per cent of the cost of insurance premiums respectively. Most fraud, according to the survey, is executed by brokers, agents, employees and clients in collusion with insiders of insurance firms. The “hotspot” fraud in the region is in motor and medical claims. “Travel insurance in Ken- ya is another hotspot. If this fraud is reduced, then we shall start seeing the cost of insurance premiums go down,” said James Norman, an associate director in-charge of insurance risk consulting at KPMG Kenya. Rising hospital bills and the high incidence of fraud Jan ‘15 Feb Mar Apr ‘15 management amongst the member firms and to step up collaboration with stakeholders,” Mr Norman told The EastAfrican last week. According to Kenya’s Insurance Regulatory Authority (IRA) a total of 120 fraudsters have been prosecuted in the past two years, among them lawyers, staff and customers. The regulator is now working with industry players to establish a data register for fraudsters. “Through this data regis- ter we shall be able to identify fraudsters who move from one company to another,” said Sammy Makove, chief executive of IRA. According to data from Motor claims are the leading source of fraud in insurance industry. Picture: File are eroding the profit margins of medical insurers as the uptake of medical covers remains relatively low. Insurers also suffer as some policyholders collude with hospitals to inflate costs, causing insurance firms to increase premiums and making medical insurance even more inaccessible. According to the survey, fraud is a significant risk to the insurance sector and is on the rise. The survey revealed that nine per cent of insurance claims made in Kenya are fraudulent. Mr Norman said that fraud in the insurance sector has adverse effects on regional economies as it undermines investor confi- dence and stifles the level of economic activities. According to the survey, half of Kenyan respondents consider insurance fraud a worse problem than banking fraud and 70 per cent view it as a worse problem than telecommunications fraud. “One way to control this fraud is to improve risk IRA, a total of 24 cases involving theft by employees in the insurance sector were reported last year. Also reported was motor vehicle claims fraud (seven cases), medical (seven) and theft by insurance agencies (24). IRA has set up an Insur- ance Fraud Investigation Unit to deal with cases of fraud in the insurance industry. Helios Investment Pa≥tne≥s, US fi≥m sign pa≥tne≥ship deal US PRIVATE equity firm TriLinc Global Impact Fund has appointed Helios Investment Partners to help it identify small and medium enterprises in Africa that it can inject capital into. The impact investor wants Helios, which in January announced it would sell its 12.24 per cent stake in Equity Bank to Norway’s Norfininvest AS, to advise it on term loan investment opportunities, which normally mature within seven years. “This partnership provides for a thrilling development in matching US investor capital with fast growing and highly impactful enterprises in sub-Saharan Africa,” said Gloria Nelund, TriLinc’s CEO. TriLinc provides trade finance to spur the growth of SMEs in developing economies that have the potential to change the lives of communities in a big way while delivering a competitive return. Helios, an Africa-focused pri- vate investment firm with teams in London, Kenya and Nigeria, manages more than $3 billion and its credit team’s senior members have more than $4.2 billion in debt transactions across Africa. Trilinc hopes Helios will create attractive investment and impact opportunities for its term loan strategy, which focuses on financing companies not well served by banks or equity investors. “Recognising the exciting invest- ment and impact opportunities in Sub-Saharan Africa, TriLinc has further deepened its activities in the region by complementing its trade finance portfolio with term loan capabilities,” said Gloria Nelund, TriLinc’s CEO. Tope Lawani, managing partner and co-founder, said it would help TriLinc offer fit-for-purpose credit for growth of companies in Africa. The partnership comes in the wake of tight market conditions that have constrained debt capital flows, hindering private enterprise growth. TriLinc mobilises capital from US investors seeking competitive returns from African enterprises. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories Stancha≥t to sp≥ead online payment plan STANDARD CHARTERED Bank intends to extend its digital payments system to collection of taxes in 12 African markets after launching the service in Kenya. The bank last week linked the Straight2Bank platform to that of the Kenya Revenue Authority, enabling importers to settle Customs dues round the clock. The seamless settlement is live in Uganda and Zambia. The other markets where Stanchart is present, including Tanzania, will be considered once their revenue authorities upgrade from manual tax collection systems. “Standard Chartered will provide the solution to any other revenue authority in the countries that digitises tax collections, since it is scalable,” Standard Chartered Bank chief executive of Lamin Manjang said. The Straight2Bank platform is used by the bank’s customers for other online payments. It will allow importers to pay for their goods on a 24-hour basis.
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