High Claims Deny Insurers Profits Despite 11.4% Premiums Increase

High claims in the insurance industry continued to pile pressure on insurers in the country, despite an improving business environment in the post-pandemic era.

Latest data shows insurance industry premiums increased by 11.4 percent to hit Sh237.9 billion in the third quarter of (Q3) 2022, from Sh213.53 billion in a similar period the previous year.

The Insurance Regulatory Authority (IRA) latest quarterly report for the period July – September 2022 indicates general insurance business recorded a total of Sh134.4 billion in insurance premiums (56.5 percent of industry total premiums), up from Sh121.4 billion recorded in Q3 2021.

Nevertheless, claims were up at Sh56.8 billion which is 76.3 percent 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.

“Motor motor private, motor commercial and personal accident classes of general insurance business incurred the highest underwriting losses of Sh2.89 billion, Sh1.75 billion and Sh868.74 million respectively,” IRA notes.

Claims in long-term insurance business also remain at the same levels of Sh60 billion incurred during the same period in 2021, despite slightly easing from Sh61.5 billion.

The segment however recorded an increase in premiums, which stood at Sh103.49 billion accounting for 43.5 percent of the total industry premium, adding to gains made by the industry during the period.

Under general insurance business, fire industrial gross premium income had the highest growth of 30.9 percent, from Sh11.55 billion reported in Q3 2021 to Sh15.12 billion reported in Q3 2022.

Personal accidents had the largest decline from Sh2.12 billion recorded in Q3 2021 to Sh2.02 billion in Q3 2022.