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Insurance industry saw a Sh4.96Billion underwriting loss in Q4 2023
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By Steve UMIDHA
The general insurance business underwriters in Kenya reported an underwriting loss of KES 4.96 billion compared to a loss of KES 3.72 billion reported in Q4 2022, according to the latest data by the regulator – Insurance Regulatory Authority (IRA).
Huge claims and disproportionate expenses may result in an underwriting loss, rather than income, for the insurer. The level of underwriting income is an accurate measure of the efficiency of an insurer’s underwriting activities.
The general reinsurers reported a decrease in net premium income of 6.7% from KES 31.74 billion reported by the end of Q4 2022 to KES 29.63 billion in Q4 2023.
The general reinsurers incurred claims amounted to KES 16.82 billion and direct expenses (commissions and management expenses) of KES 12.74 billion. The result was an underwriting profit of KES 591.75 million and operating profit of KES 4.75 billion as at the end of Q4 2023.
In Q4 2023, general insurance premiums amounted to KES 191.34 billion. The general insurance business underwriters incurred claims amounting to KES 86.09 billion as at end of Q4 2023. The claims incurred loss ratio remained at 67.9% in the quarter under review in comparison to Q4 2022.
The premium reported by the long-term insurers in Q4 2023 amounted to KES 170.02 billion, a growth of 20.7% compared to a growth of 13.8% the previous year.
The long-term insurers’ asset base grew by 14.2% to KES 728.75 billion and largely composed of income generating investments of KES 695.42 billion.
Of the total assets, 10.5% (KES 76.82 billion) was funded through shareholders’ equity.
