Businesses & Financial News

Motor, medical insurance biggest loss-makers

The Kenyan insurance industry recorded GWP of KES 235.31 Billion compared to KES 231.30 Billion in 2019. Despite this growth, insurance penetration has declined to 2.30% in 2020 from 2.37% in 2019.

By Remie Otieno

Motor private and medical classes of general insurance business incurred the highest losses of Sh1.04 billion and Sh628.58 million respectively, according to the latest industry statistics.

The latest Industry Statistics by the Insurance Regulatory Authority (IRA) indicate that, while the sector registered improved performance in the first quarter of 2022 compared to previous quarters, the two above two classes suffered back to back losses.

Industry gross written premiums in the first quarter of 2022 went up by 11 % to Sh88.43 billion from Sh79.26 billion in Q1 2021.

IRA data shows that the General Insurance premiums amounted to Sh53.92 billion while the premium reported by the long-term insurers in the period under review hit Sh34.51 billion, a growth of 12.1 percent compared to a growth of 18.6 percent the previous year.

Despite registering highest claims payment, Medical and motor insurance classes maintained a leading position in terms of contribution in general insurance business premium at 35.9 percent and 27.5 percent respectively.

According to the report, the underwriting performance of the general insurance business was a loss of Sh510.20 million which was an improvement from a loss of Sh1.74 billion reported in Q1 2021.

Personal accident class made the highest underwriting profit of Sh712.27 million while motor private and medical classes of general insurance business incurred the highest losses of Sh1.04 billion and  Sh628.58 million respectively.

“The long-term insurers’ asset base grew by 12.9 percent in the period under review to Sh580.21 billion and largely composed of income generating investments of KES 537.83 billion.  Of the total assets, 9.5 percent or Sh55.17 billion was funded through shareholders’ equity,” reads the report in part.

The reinsurers’ business volume increased by 33.2 percent to Sh10.57 billion in the period under review compared to Sh7.94 billion, same period last year leading to an underwriting profit of Sh517.18 million from a loss of Sh990.23 million in Q1 2021.

The insurance industry asset base grew by 10.5 percent to Sh876.58 billion as attend of Q1 2022 from Sh793.24 billion held as at end of Q1 2021.

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