NHIF’s U-turn in Sh6bn insurance for civil servants

NHIF headquarters in Upperhill, Nairobi. FILE PHOTO | NMG

Insurers will now bid for Sh6.33 billion civil servants insurance cover after the National Hospital Insurance Hospital Fund (NHIF) made a U-turn from handpicking underwriters for the lucrative

business.

NHIF Tuesday opened the tender that now gives all insurers equal chance to bid to offer group life, last expense, group personal accident and work injury benefits to civil servants and National Youth Service.

This is a departure from an earlier arrangement in which NHIF was seeking to handpick the top five group life underwriters based on the annual gross written premiums.

“That arrangement had left out other insurance players since it was almost seen as single sourcing, which is against the public procurement laws,” said a key industry player familiar with the matter.

The chosen five would then have each picked two other insurers of their choice to share the risk with.

NHIF tender documents now show that the criteria for picking the insurers for the cover has now been extended beyond just looking at the annual gross written premiums.

Bidders will among other things be scored on among other things their ability to settle claims at the shortest time possible,

“Underwriter must provide evidence of the least period used to settle previous claims upon presentation of all requirements,” says NHIF in the tender.

But insurers with general insurance cumulative three-year gross premiums above Sh17.5 billion and those whose group life, last expense and group credit is above Sh3.5 billion in the review period will still be ranked high.

Those with evidence of having handled clients with premiums of over Sh10 million in the last three years will also be given high marks.

The comprehensive insurance cover was launched mid-November and will see annual premiums rise seven-fold from the current Sh839 million.

The cover will run on a co-insurance model, with about 15 insurance companies coming in to share the risk with NHIF.

Life insurers will get up to Sh3.82 billion of the premiums to cover group life including Covid-19 and suicide. It will also cover critical illness and last expense for principal member, spouse and children.

General insurers will get up to Sh2.51 billion annual premiums for group personal accident and work injury benefits including Covid-19.