Tackling insurance fraud, consumer protection and premium undercutting by underwriters, are among the focus areas for the new Insurance Regulatory Authority (IRA) chairman Moses Mabonga.
The former Bumula MP who on Thursday officially took over from outgoing chairman Mohammed Sheikh Amin, said he is equally keen to lead the board and management in adopting ICT in improving consumer trust in order to drive insurance penetration in the country.
Penetration is at a low of 2.43 per cent, despite Kenya 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.
Fraudulent motor accident (injury) claims, theft and stealing by agents, and obtaining by false pretence among others the top reported cases, according to IRA data.
There has also been cases of policyholders being duped to schemes that fail to match final settlements, a move that has seen the public remain suspicious about taking up insurance, despite its major role in socioeconomic development.
Premium undercutting by firms in a race to protect their market share is also a major challenge, with the trend blamed for underwriting losses in the industry.
This is on the back of high claims in the industry, which continue to pile pressure on insurers, despite an improving business environment in the post-pandemic era.
Latest industry data shows insurance industry premiums increased by 11.4 per cent to hit Sh237.9 billion in the third quarter of 2022, from Sh213.53 billion in a similar period the previous year.
During the period, general insurance business recorded a total of Sh134.4 billion in insurance premiums (56.5 per cent of industry total premiums), up from Sh121.4 billion recorded in Q3 2021.
Claims were up at Sh56.8 billion which is 76.3 per cent of the earned premiums in the business segment, up from Sh5 1.3 billion.
This saw the general insurance business remain at a loss of Sh2.26 billion, despite it being an improvement from Sh4.13 billion in 2021.
“The desired industry growth and insurance penetration cannot be achieved when issues of insurance access, costs and consumer trust remain a challenge,” Mabonga said.
He said IRA’s 2023-2027 Strategic Plan will seek to put in place intervention strategies to address issues in the sector, as the Authority strives to put in place measures aimed at promoting insurance and protecting the insured.
Last year, the insurance industry profit before tax grew by about three per cent to Sh9.1 billion, up from Sh8.79 billion recorded in a similar period in 2021.
Asset base grew by 9.8 per cent to Sh918.02 billion at end of Q3 2022 from the Sh836.11billion held at end of Q3 2021.
A significant portion of total assets, Sh805.42 billion or 85.6 percept, was held in income-generating investments.
