Insurance profits up by 41pc, even as medical, motor insurance book huge losses
Insurance Regulatory Authority chairman Mwambu Mabonga during the official handover at the authority's Upperhill office on February 16, 2023. The insurance industry's gross premiums increased by Sh37 billion to Sh312 billion in 2022.
Insurers paid claims totalling Sh152 billion last year, even as industry profits rose by 41 per cent to Sh11.88 billion.
The Insurance Market Report, 2022 shows that the insurance industry's gross premiums increased by Sh37 billion to Sh312 billion last year on the back of recovering economic activity, digitalisation and increased strategic partnerships.
"The company with the highest gross written premium was Old Mutual with Sh14.86 billion, followed by APA and GA Insurance with Sh14.65 billion and Sh13.92 billion respectively.
Only 5 companies managed to break the Sh10 billion mark," the report said.
Motor and medical insurance companies paid the highest claims with Sh37.6 billion and Sh32.4 billion respectively, although they remain loss-making ventures with insurers expressing concern over widespread fraud.
The report notes that while the two businesses account for almost two-thirds of general insurance premiums in the country, "they are also the biggest loss-making businesses in non-life insurance".
“Gross premium for Motor (private) Insurance grew by 4.86 percent but it also recorded the highest loss of Sh4 billion an improvement from a loss of Sh5.9 billion in 2021. Motor (commercial) insurance gross premium grew by 2.48 percent but made a Sh2.97 billion loss compared to sH2.99 billion in 2021. Medical insurance gross written premium grew by 15.22 per cent but the business recorded a Sh885 million loss,” the report said.
"Despite the growth in business income, high administrative expenses and fraud continue to erode profits in motor insurance while medical insurance is plagued by fraud and high healthcare costs," it adds.
At the company level in the general insurance business, Jubilee Allianz (Sh867.68 million), Kenya Orient (Sh790.1 million), Occidental (Sh636 million), Invesco (Sh505 million) and Kenya Alliance (Sh427.4 million) made the biggest losses in 2022.
On the other hand, GA Insurance topped the list of general insurance profit makers with a profit of Sh821.6 million, followed by Mayfair (Sh326.6 million), AIG (Sh234 million), ICEA Lion (Sh232 million) and APA (Sh212 million).
In medical insurance in particular, the report notes that only seven of the 19 insurers in the industry made profits as the business remained in the red for the second year running.
This is despite the fact that premiums in the industry have continued to grow over the past five years to reach Sh51.4 billion last year.
"Only seven out of the 19 companies made an underwriting profit in 2022. The medical insurance business has made losses for the past two consecutive years," it said.
The industry made a total loss of Sh1 billion in the medical insurance business, with the biggest loss-makers being Madison (Sh376 million), AAR (Sh349.3 million), Pacis (Sh222.8 million) and Old Mutual (Sh158.9 million).
The underwriting loss for the general insurance business fell to Sh3.2 billion from Sh4.9 billion in 2021.
"The highest underwriting profit was recorded by Work Injury Benefits (WIBA) at Sh2.21 billion. Net claims incurred also increased by 13.21 per cent from Sh69 billion in 2021 to the Sh78 billion recorded in 2022."
In Life Insurance, premiums increased to Sh141.3 billion from Sh124.7 billion in 2021, as Pension Administration dominated the Life Insurance business with a 41.9 percent share of gross premiums, followed by Ordinary Life at 27.5 percent.
Life insurance claims paid totalled Sh76.3 billion.
