Close

Insurance sector

Pension boosts insurance growth in Q3 - IRA

Saving experiencing slow growth

In Summary

• Payment by policy takers rose by 4.2 per cent increase to Sh216.37 billion.

• General insurance business grew by 3.5 per cent to Sh129.02 billion from Sh124.70 and Sh121.67 billion in 2017 and 2016 similar period respectively

• Long term insurance gross premium grew by 5.3 per cent to Sh87.33 billion, from Sh82.97 billion and Sh73.06 billion same period 2017 and 2016 respectively.

The Jubilee Insurance House
The Jubilee Insurance House

Insurance uptake in the country increased in the three months to December 2018 marked by an increase in premiums to Sh216.37 billion.

New Q4 industry report Insurance Regulatory Authority showed the payment by policy takers rose by 4.2 per cent increase from Sh207.68 billion in same period 2017, indicating the industry is setting back on its foot from previous years' poor performance.

General insurance business grew by 3.5 per cent to Sh129.02 billion from Sh124.70 and Sh121.67 billion in 2017 and 2016 similar period respectively.

This marked 59.6 per cent of the total premium, driven by compulsory motor insurance.

“This was also attributed to the medical insurance class that has gained prominence in recent years due to increasing middle-income population and rising cost of healthcare that has necessitated the purchase of health insurance covers,” IRA stated.

Long term insurance gross premium grew by 5.3 per cent to Sh87.33 billion, from Sh82.97 billion and Sh73.06 billion same period 2017 and 2016 respectively.

Pensions and life assurances were key contributors to income in this business accounting for 38.8 per cent and 27.8 per cent respectively.

This is despite the general insurance incurring claims worth Sh56.77 billion, 3.5 per cent more compared to Sh54.86 billion over the period.

“General insurance business underwriting results declined significantly in 2018 to record an underwriting loss of Sh1.65 billion,” the report stated.

Payouts under life insurance however declined by 1.4 per cent to Sh45.26 billion.

 

According to Bima intermediaries association of Kenya chairman Washington Ndegea, penetration of the service has been achieved by efforts of over 10,000 agents in the industry.

However, there are no proper practices to encourage more to join the industry.

During the period, commission payments for life insurance business went down by 1.2 per cent, Sh65.67 million. General insurance commission ration also declined to 7.2 from 7.4.

“The premiums represent a big figure but questions should be asked as to where these commissions belonging to insurance agents go to,” he said.

Many have left the industry due to loss of commissions through unfair means like claw back, a system where the company gets back all the commissions the agent earned during the period.

Marine insurance made a 3.3 per cent decline over the period to Sh3.50 billion.

“Insurance cover on imports and exports cannot be forced on the populace because it would be going against international trade practices,” he added.