Return to hospital raises insurers’ medical claims
Jubilee Holdings Limited Chairman Nizar Juma (centre), regional chief executive officer Julius Kipngetich (left) and Juan Cascarra, the chief operating officer, during the release of the firm’s half-year financial results at the Jubilee Insurance House, Nairobi.
Medical claims at Jubilee Health Insurance jumped 50 percent to Sh2.79 billion in the six months to June this year after fear of contracting Covid-19 in hospitals subsided and more Kenyans sought in person medical care.
Its claims also went up from Sh1.86 billion last year as patients went for coronavirus treatment in hospitals even as the government relaxed Covid-curbs allowing for more movement.
Health insurance companies made underwriting profits last year from a loss-making position the previous period as Kenyans stayed away from hospitals amid fear of contracting the Covid-19 virus.
Despite the higher claims, Jubilee Health Insurance posted an underwriting profit of Sh374.9 million in the half year remaining the most profitable health insurer in the country.
Sh6.15 billion
It made Sh6.15 billion in gross written premiums for the half year ended 30th June 2021 compared to Sh4.93 billion last year, representing a growth of 25 percent in the period under review.
“The slight drop in profit has been attributed to an increase in claims as more Kenyans visited health facilities to seek medical support and the inclusion of Covid-19 as part of the health insurance covers,” Jubilee Health Insurance Senior Officer, Dr Patrick Gatonga, said in statement yesterday.
“Total claims stood at Sh2.79 billion compared to Sh1.86 billion in the same period last year while claim ratios rose to 70.2 percent compared to 65.3 percent in 2020 a trend that was replicated across the industry and attributed to the gradual opening of the economy that allowed more movements,” he said.
At the height of the pandemic, the government imposed restrictions on movement including curbs into Nairobi city, which saw a decline in the number of patient visiting hospitals.
Lower visits, however, worked in favour of health insurance companies, which made Sh1.3 billion in underwriting profits last year from a loss of Sh75 million in 2019.
Loss-making territory
This year, the insurance industry is dealing with an increase in claims following re-opening of the economy that has sent some players back into the red.
The 2021 Q2 Report released by the Insurance Regulatory Authority shows the sector plunged back into loss-making territory posting Sh1.46 billion in underwriting losses especially due to general business, reversing a profit of Sh62.4 million in a similar period last year.
Insurance companies have had to rely on other investments including fixed income, government securities, real estate and subsidiaries to subsidise falling industry profits.
The firms reported a 19 percent jump in gross premiums for the period ended June to Sh144.02 billion compared to Sh121.04 billion in the same period last year.
Investment income under the long-term business jumped to Sh26.3 billion from Sh12.4 billion over the period.
