NAIROBI - Kenya's insurance firms on Wednesday said between 30 and 40 percent of all life insurance claims in the East African country are fraudulent declarations with cases of life insurance claimants faking death and "killing" spouses on the increase.

Pan Africa Insurance Holdings CEO Tom Gitogo said due to this, payments have tended to take longer than necessary because all claims must be verified cautiously.

"Insurance companies have for long been accused of taking long to effect payment of claims. However, due to the high turnover of fraudulent claims that are received for compensation, close to a half of them are not genuine claims where fake documents are uttered in a bid to effect payment," Gitogo said.

The CEO, who is also a member of the conference organizing committee, he said in Nairobi while highlighting the African Insurers Organization (AIO) conference that opens on Thursday.

He said owing to changed circumstances where a lot of dependency on friends and relatives is decreasing during misfortunes, the insurance industry is delving into ways of formalizing the informal insurance that has for long been applied to assist those who have fallen victims to misfortunes like deaths and accidents.

"One can no longer rely on the informal insurance where their kin solved their problems by pooling resources together because of the diminishing size of the wallet," he said.

He regretted that by not teaching insurance earlier in the school curriculum, people were growing up in ignorance on matters pertaining to the industry and were only coming into contact with it later in adulthood.

The conference, which will run for two days under the theme "Enhancing Value and Trust in Life Insurance Distribution for Magical Growth in Africa" has attracted over 300 delegates from 45 countries in Africa and will cover various topics pertaining to life insurance business, including the use of technology to enhance growth in the industry.

The chairman of AIO, Clerand Cofie Bruce life insurance is significant to a country because apart from its obvious noteworthiness, it is also a source of income that can impact positively on economic growth.

"Life insurance penetration in Africa is considerably low at an average one percent. Doubling this figure to two percent can make a big difference in the economy of a country," said the Ghanaian national.

He said in a continent where the majority live on less than $1.25 per day, it was understandable why the penetration rate is low but added that it was not an excuse for things to remain the same way because the industry can come about with tailor-made products for those in the informal market.

"In Africa the informal market is bigger than the formal market, and therefore it is not easy for those who are struggling to put food on the table to have money to spare for insurance purposes. They must have their own products made to meet their needs."

The Executive Director of the Association of Kenya Insurers Tom Gichuhi said attributed the low insurance penetration in the continent to low purchasing power and lack of awareness.

"Insurance penetration in Africa is highest in South Africa and Kenya where it stands at 3.05 percent, though is most other countries it averages at one percent. Everyone needs insurance, but the capacity is not there for majority of the people," Gichuhi said.

Africa Insurers Organization was established in 1972 as a non-governmental organization and is recognized by many African governments. Its objective is to develop a healthy insurance and reinsurance industry in Africa and promote inter-African cooperation in Africa.