Kenya Insurance Industry 2016 Key Statistics

Following the release of the annual insurance industry report for the year ending December 2016, both the industry regulator Insurance Regulatory Authority (IRA) and Association of Kenya Insurers (AKI) reports told a fairly similar story.

The industry continues to grow at a respectable pace and remains one of the strongest in Sub Sahara Africa dwarfing our neighbouring countries of Uganda, Rwanda, Tanzania and Burundi.

The issue of fraudulent claims has persisted with various actors in the stakeholder groups perpetrating billions of shillings of fraud.

Below is a summary of the key stats from the insurance industry 2016

Insurance Premiums

1. The total gross premium income has grown 13 percent to KSh 196.64 billion from the previous year 2015 figure of KSh 173 Billion.
2. General premiums surged by 10.2% to 121.7b shillings last year from 110.5b in 2015.
3. Medical insurance makes up 31.7% of general premiums while motor insurance class including private and commercial takes up 36.5%.
4. General insurance net earned premium also recorded a growth of 9.9% to Ksh87.46 billion.

Claims

1. Insurance companies paid out claims amounting to Ksh54.86 billion in the year ended June 2016. This represents an 11.8 percent increase on the Ksh52 billion that registered insurance companies paid out the previous year 2015.
2. The commercial and private motor class accounted for half of the total claims paid out equalling to KSh 3.29 billions. There remains a high level of insurance fraud in the motor insurance business perpetrated by motor assessors, valuers, garages, insurance intermediaries and surprisingly members of the police as well. In addition to the fraud, an ever rising number of traffic car accidents have also led to the increased losses.
3. The medical class of business incurred 33 percent of total insurance claims paid out again thanks to fraud perpetrated by clients and medical service providers like consultants, clinics and hospitals. The total amount of claims incurred in the medical business amounted to KSh 18 Billions.
4. This saw the general insurance business in Kenya report an underwriting loss of Ksh2.13 billion.

In summary, the industry has also recorded an 11.8% increase in claims which stood at KSh 49B in 2015.
Workmen’s compensation accounted for 5.4% of the total claims while others was 11%.
Underwriting loss stood at KSh 2.13 billion driven by private motor class of business that cost insurers KSh 3.29 billion.
During the year to June 2016, the personal accident class of business plunged insurers to a loss of Ksh126 million down from a profit of 832 million shillings the previous year.
Other loss making classes were workmen’s compensation KES 100.67 million, aviation Ksh 90.55 million and Engineering Ksh 58.09 million.

Nonetheless insurers continue to attract new policyholders where in 2016, 1.03 million new policies were written under general insurance business and 1.25 million policies renewed resulting to a total of 2.28 million active policies.
This is a 29.5% increase from 1.76 million policies that were written the previous year.

Image : AKI Insurance Report 2016