PLUNG

Insurance earnings hit as non-life business loss hits Sh3.27bn

This was a dip from a Sh2.86 billion loss in 2018 and Sh1.01 billion the previous year.

In Summary

•Motor private recorded the highest loss of Sh4.67 billion in 2019 compared to Sh2.70 billion in 2018 and Sh2.74 billion in 2017.

•Medical insurance however made underwriting profit of Sh204 million from a loss of Sh1.08 billion in 2018 and Sh514 million in 2017.

An Insurance Regulatory Authority(IRA) stand at a recent conference in Nairobi.
An Insurance Regulatory Authority(IRA) stand at a recent conference in Nairobi.
Image: COURTESY

Non-Life insurance made an underwriting loss of Sh3.27 billion in 2019, occasioned by high claims and expenses, latest industry data shows.

Insurance Regulatory Authority (IRA) and the Association of Kenya Insurers (AKI) statistics show businesses made losses in key non-life insurance business propelled mainly by losses incurred by motor classes.

The loss is a further dip from Sh2.86 billion loss in 2018 and Sh1.01 billion the previous year.

 

“Motor private recorded the highest loss of Sh4.67 billion in 2019 compared to Sh2.70 billion in 2018 and Sh2.74 billion in 2017,” AKI said yesterday.

Motor commercial made a loss of Sh2.68 billion in 2019 compared to a loss of Sh1.12 billion in 2018.

Motor combined had underwriting loss of Sh7.30 billion according to AKI.

Other segments that suffered losses were personal accidents, engineering and aviation segments of the non-life business.

Medical insurance however made an underwriting profit of Sh204 million from a loss of Sh1.08 billion in 2018 and Sh514 million in 2017, indicating an increase in uptake and use of medical insurance.

IRA on the other hand has captured total underwriting insurance losses at Sh3.16 billion compared to Sh2.58 billion loss in 2018.

“The significant increase in underwriting losses is due to losses incurred by motor classes,” IRA notes in its 2019 insurance industry annual report.

 
 

The industry Gross Premium Income (GPI) however grew by 6.1 per cent to Sh229.50 billion in 2019 compared to Sh216.26 billion reported in 2018.

The insurance market remains general business dominated.

IRA data shows general and long term insurance business accounted for 57.6 per cent and 42.4 per cent of total industry premiums respectively.

During the year, long term insurance registered a growth of 11.4 per cent in GPI amounting to Sh97.40 billion while general insurance business GPI grew by 2.5 per cent to Sh132.10 billion in 2019.

Net income claims during the year closed at Sh117.30 billion according to AKI data, an increase from Sh111.01 billion the previous year.

Commissions and expenses increased to Sh76.36 billion from Sh69.63 billion.

The industry developments came with a drop in insurance penetration in the country which fell to 2.37 per cent compared to 2.43 per cent in 2018.

Kenya remains the leading in the region on uptake of insurance. It is followed by Rwanda with a 1.70 per cent penetration, Uganda (0.84 per cent), Burundi(0.77 per cent) while Tanzania has a 0.53 per cent penetration.

Insurance penetration in Africa is at 0.3 per cent.

The number of insurance companies in the country went up to 56 last year up from 53 the previous year.

There are five re-insurance companies, 220 insurance brokers (up from 215) and 10,471 insurance agents, which was an increase from 8,612 agents in 2018.

An Insurance Regulatory Authority(IRA) stand at a recent conference in Nairobi.
An Insurance Regulatory Authority(IRA) stand at a recent conference in Nairobi.
Image: COURTESY