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By Steve Umidha
Major insurance companies handling life covers are working out ways to reallocate financial risks after the class recorded a 27. 2 per cent jump in benefits paid during the second quarter of 2016.
The new high according to the latest industry data by Insurance Regulatory Authority (IRA) reflects a growing demand for this type of coverage as insurers continue to pay out more in claims for policy purchases.
Financial services provider Britam and Prudential Plc both in total introduced six new life insurance products during the period under review, indicating what the industry should expect in the last quarter of 2016.
The IRA report shows that claims paid in life insurance class rose to Sh18.77 billion from Sh14.76 reported over a similar period last year, compared to Sh6.88 billion rise in claims incurred by the industry during the quarter of Sh24.48 billion.
A total of Sh23.57 billion was paid out as claims by general insurers.
The appetite comes even as the industry’s penetration continues to stagnate at just 3.0 per cent over the years, lower than the average of 3.8 per cent in Africa.
The report also indicate that the industry experienced a lower growth rate during the quarter under review compared to that recorded in the second quarter of 2015.
Insurance premiums during the second quarter of 2016 registered a year-on-year growth of 9.2 per cent compared to15.3 per cent year -on-year growth registered in the second quarter of 2015, while the non-life segment continue to dominate the market.
General insurance segment contributed 66.2 per cent (Sh63.90 billion) while long-term insurance business contributed 33.8 per cent (Sh32.60 billion) of the total premium written by insurers during the quarter.
The year-on-year premium growth experienced in general insurance business was however lower than that recorded under long-term business for both insurers and reinsurers.