It started off as the flu in rural China and within weeks had quickly spread around the world. The World Health Organisation (WHO) declared the Corona Virus Disease a pandemic and the rest is history. If you have a life, accident, health or even travel policy, then at some point you must have wondered if your policy covers you during times of pandemics.

The Insurance Position on Epidemics, Pandemics and Unknown Diseases

The technical and theoretical position on disease epidemics, pandemics or unknown diseases is that they amount to catastrophes or “acts of god”. The founders of insurance principles excluded losses arising out of catastrophic events because of the potential of a huge number of losses which would be impossible for a single insurer or even an entire industry to honour. An insurer receiving such claims would most likely be unable to pay and succumb to bankruptcy which would be bad for the overall economy. Also, the insurer may not have sufficient risk data to compute a premium.

Pandemics and Health Insurance

Health insurers in Kenya exclude claims arising out of epidemics, pandemics and unknown diseases. However, in the wake of the COVID-19 outbreak, the Association of Kenya Insurers (AKI) in consultations with the Insurance Regulatory Authority, and in support of the Government’s efforts to mitigate and contain the spread of the disease, agreed to provide support to insured customers within the designated facilities offered by Kenya’s Ministry of Health (MOH).

However, there are no guarantees that future pandemics and epidemics will have similar interventions.

Pandemics and Life Insurance

Life Insurers probably face the greatest challenges because pandemics, epidemics and unknown diseases can drastically alter the mortality rate which is a primary consideration when computing life insurance premiums. The long-term impact is yet to be seen. However, most life insurers in Kenya have agreed to continue honouring claims arising from the COVID-19 pandemic.

Pandemics and Travel Insurance

The practice with travel insurance is that any losses such as flight cancellations, medical treatment, evacuation and so forth are usually excluded. This risk remains excluded by Kenyan insurers in the wake of the COVID-19 disease pandemic.

Pandemics and Non-Life Insurance

The impact of pandemics, epidemics and unknown diseases on non-life insurance isn’t immediately apparent. However, even non-life insurers can suffer considerable losses. For example;

  • Trade Credit insurers can see a rise in claims where creditors default on supplier payments due to business slowdown as a result of lockdowns.
  • Event cancellations can also lead to a rise in claims for event insurance. For example, the Tokyo 2020 Olympics had to be cancelled due to the COVID-19 pandemic.
  • Work Injury Benefit claims can also increase where employees feel that their employer failed to provide them with adequate protection at work.

Many non-life insurers did not have exclusions specific to pandemics, epidemics and unknown diseases. These were introduced following the 2003 SARS outbreak.


From the foregoing, it is clear that epidemics, pandemics and unknown diseases aren’t covered by standard insurance contracts. Thankfully, major social challenges such as pandemics usually come with government interventions that make it possible for insurers to relax policy exclusions.

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