FINANCIALS

AAR sheds loss to post Sh517 million profit

In Summary
  • The health underwriter recovered from a Sh253 million loss in 2018 as a result of growth in revenue, commission earned from reinsurance arrangement, efficient claims management and savings on management expenses.
  • AAR insurance is the second largest medical underwriter in Kenya with over 100,000 customers.
AAR Insurance Kenya Managing Director Nixon Shigoli
AAR Insurance Kenya Managing Director Nixon Shigoli
Image: COURTESY

AAR Insurance recorded an improved performance in 2019 posting a Sh517million profit due to a reduction in claim ratio.

Enhanced efficiency in claims management led a drop in net claims to Sh1.7 billion from Sh3.3 billion in 2018.

This was majorly driven by improvement in technology and efficiency in claims processing which led to reduction in claims incurred compared to prior year.

The health underwriter recovered from a Sh253 million loss in 2018 as a result of growth in revenue, commission earned from reinsurance arrangement, efficient claims management and savings on management expenses.

“The overall improved performance is attributed to a realignment of the business to focus on enhanced efficiency, product innovation and expanding into new market segments,” said AAR Insurance Kenya Managing Director, Nixon Shigoli .

Gross written premiums increased by 4.5 per cent from Sh5.6 billion to Sh5.9 billion while operating expenses declined from Sh1.1 billion to Sh1.08 billion.

Income from fees and commissions rose from Sh32 million to Sh586 million owing to new reinsurance arrangements placed.

Total assets rose by 24 per cent from Sh3.9 billion to Sh4.8 billion, with shareholders’ funds increasing from Sh563 million to Sh1.1 billion during the period under review.

“Apart from enhancing business efficiency, we are expanding our business portfolio by targeting under-served markets like small and medium enterprises (SMEs) and microinsurance,” said Shigoli.

In 2019, AAR Insurance rolled an SME medical cover and sealed a partnership with Kenya Women’s Finance Trust (KWFT) to roll out a microfinance product Afyafit for KWFT customers.

AAR insurance is the second largest medical underwriter in Kenya with over 100,000 customers.