- Kenya is ranked fourth in Africa in terms of gross premium income after South Africa, Morocco and Egypt.
- The industry total assets increased by 12.5 per cent to Sh956.87 billion in 2022 from Sh850.51 billion the previous year.
The number of people with insurance covers in Kenya grew slightly in 2022 as youthful population continues to ride on technology to safeguard their future.
The sector's end of year report by Insurance Regulatory Authority (IRA) however shows the speed of uptake was constrained by high inflation that saw families prioritise needs.
According to the report, insurance penetration, which is the ratio of gross direct insurance premiums to GDP, increased to 2.29 per cent in 2022 compared to 2.25 per cent in 2021.
Insurance density, which is the ratio of gross direct insurance premium to total population, increased from Sh5, 442 in 2021 to Sh6, 061 in 2022 indicating an increase in spending on insurance.
"The insurance industry in Kenya experienced growth as a result of economic recovery from the effects of Covid-19," the IRA report says.
In 2022, the industry recorded Sh310.27 billion in gross premium compared to Sh273.7 billion in 2021, translating to a growth of 13.4 per cent (5.3 per cent in real terms).
Kenya is ranked fourth in Africa in terms of gross premium income after South Africa, Morocco and Egypt.
During the period, the industry net profit increased significantly by 70.2 per cent from Sh8.65 billion to Sh14.72 billion.
Long term insurance business grew by 14 per cent (5.9 per cent in real terms) to Sh140.95 billion in 2022 compared to Sh123.69 billion in 2021.
General insurance business grew by 12.9 per cent (4.8 per cent in real terms) to Sh169.32 billion in 2022 compared to Sh150.02 billion in 2021.
The segment still dominates the industry accounting for 54.6 per cent of total premium.
The industry total assets increased by 12.5 per cent to Sh956.87 billion in 2022 from Sh850.51 billion the previous year.
The industry investments increased by 13.7 per cent from Sh733.46 billion in 2021 to Sh833.72 billion as at the end of the year under review.
The investments were mainly composed of government securities at 71.4 per cent orSh595.64billion.
Africa reported premium of $70.17 billion accounting for one per cent of the world insurance premium.
This was a decline of 2.6 per cent in premium compared to an increase of 6.1 per cent in 2021.
Africa’s long term insurance premium decreased by 4.2 per cent in real terms to $46.90 billion whereas, the general insurance premium recorded a growth of 1.2 per cent to $23.26 billion due to economic rebound from pandemic-induced recession in 2020.
Global regulatory trends show that tougher regulation and increased pressure to perform can improve the sector’s prospects and encourage investment.
"We are monitoring the implementation of IFRS 17 by the industry. We have enhanced industry and internal capacity to ensure that the transition to this new accounting standard is seamless, '' IRA boss Godfrey Kiptum.
Looking ahead, some of the most important considerations for customers include the availability of simple and custom-made policies that address their unique needs.
IRA says there is need to structure and design insurance products that address the modern-day insurance needs as well as growing investments.
The regulator counts on advances in technology and the accompanying explosive growth in data as key factors empowering global consumers like never before.
"To compete in this new era, insurers must understand how consumers make purchasing decisions and what factors influence their choices''.
Other interventions that will help the industry align to the evolving dynamics include developing strategic partnerships and acquisitions with fintechs and telcos with existing loyal customer bases.