In Kenya’s insurance industry, where over 58 insurers and reinsurers compete for market share, the sector is experiencing a notable upswing, a report by the Insurance Regulatory Authority (IRA) shows.
Despite challenges, key players such as CIC, Jubilee, Britam, ICEA, Lion General, and APA Insurance continue to shape the industry’s trajectory.
The mid-year quarter of 2023 witnessed a remarkable surge in premiums collected, reaching an impressive Kes269.30 billion. This represents a significant 13 percent increase compared to the same period in 2022, where premiums totaled Sh237.90 billion.
Dominance of General Insurance
General insurance dominates the sector, accounting for a substantial portion of the total gross written premiums. Specifically, the general insurance class contributed Kes153.72 billion, constituting approximately 57 percent of the industry’s total gross premium income.
Notably, motor vehicle and medical insurance classes led the pack, representing 63.0 percent of the gross premium income under this category.
Despite its dominance, however, the general insurance segment faces challenges, particularly in the motor insurance class, where both commercial and private vehicles incurred significant underwriting losses totaling Kes5.6 billion.
The overall underwriting performance of general insurance deteriorated, with losses increasing from Kes2.26 billion in Q3 2022 to Kes4.09 billion in Q3 2023.
Steady Growth in Long-Term Insurance
Conversely, the long-term insurance business has shown steady growth, recording an impressive 11.7 percent increase from Kes103.49 billion in Q3 2022 to Kes115.58 billion in Q3 2023.
This growth is mirrored in the long-term insurers’ asset base, which expanded by 11.4 percent to Kes705.77 billion, primarily fueled by income-generating investments.
While the insurance sector recovered from the pandemic hit, reinsurers faced a slight setback, experiencing a 2.3 percent decrease in business from Kes28.06 billion in Q3 2022 to Kes27.40 billion in Q3 2023.
Consequently, underwriting results plummeted from a profit of Kes1.26 billion to a loss of Kes407.87 million during the same period, the report shows.
Overall Sector Growth and Profitability
Despite challenges, the insurance industry’s profit pre-tax surged to Kes13 billion, marking a significant 43 percent increase compared to Q3 2022. The sector’s asset base also saw substantial growth, reaching Kes1.03 trillion by the end of Q3 2023, reflecting a 12.2 percent increase from the previous year.
Notably, a significant portion of these assets is invested in income-generating ventures, signaling sustained financial health and market resilience.