Return to hospitals sends health insurers into ICU


The Insurance Regulatory Authority (IRA) data shows nine companies made underwriting profits in the third quarter of 2021.

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What you need to know:

  • Despite premiums rising, profits are thinning for some firms.
  • Only a third of firms posted profits for the nine months to September last year.

Only a third of health insurance firms posted underwriting profits for the nine months to September 2021 as the majority were unable to repeat the Covid-19 feat, which saw 69 per cent of medical underwriters post healthy returns the previous year.

The Insurance Regulatory Authority (IRA) data shows nine companies including Jubilee Insurance, UAP, Trident, Pacis, Alliance, Heritage, GA, First Assurance and CIC made underwriting profits in the third quarter of 2021.

This was down from 17 companies that posted profits in a similar period in 2020 when Kenyans stayed away from hospitals over fears of contracting the virus and government curbs on travel, which limited access to health facilities in Nairobi.

Companies that managed to grow premiums strongly in 2021 were able to meet a sharp increase in premiums as the curbs were lifted.

Medical premiums for the nine months to September stood at Sh40.8 billion from Sh36.2 billion the previous year, while incurred claims increased from Sh14.7 billion to Sh15.1 billion.

Jubilee, which grew gross premiums 14 per cent to Sh7.7 billion for nine months to September 2021, retained top spot as the most profitable underwriter in the sector with Sh586 million.

CIC was the second most profitable insurer, posting Sh315.5 million, while First Assurance was third with Sh99 million in profits.

“Our net claims rose by Sh1.5 billion, from Sh2.9 billion to Sh4.4 billionwhile claim ratios rose to 71 per cent compared to 67 per cent in 2020. This was partly attributed to the gradual opening of the economy and easing of travel restrictions countrywide which resulted to increased hospital visits by clients,” Dr Patrick Gatonga of Jubilee Health Insurance said in a statement yesterday.

Health insurance companies made underwriting profits last year from a loss making position the previous year as Kenyans stayed away from hospitals amid fears of contracting the Covid-19 virus.

At the height of the pandemic, the government imposed restrictions on movement, including curbs into Nairobi city, which saw a decline in patient numbers, playing in favour of providers.

Even as the windfall unwinds with higher medical claims, insurance companies have been able to grow health insurance premiums 12.7 per cent as more Kenyans seek medical cover given the Covid 19 health crisis.

The Covid -19 scourge continues to shape behaviour and business performance even as the country adjusts with increased vaccination to combat the virus.

IRA has compelled health insurance companies to cover the pandemic and include the Covid-19 jab in their policies.


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