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Insurance firms have reduced underwriting losses in the general insurance business to Sh510 million during the first three months of the year from Sh1.74 billion recorded in the same period last year.

The latest industry statistics from the  Insurance Regulatory Authority indicate that the sector continued to register improved performance in the first quarter of 2022 compared to previous quarters.

Motor private and commercial and medical classes of insurance business, it says, reported losses of about Sh1.67 billion during the period under review.

Medical, motor private and motor commercial had the highest amounts of paid claims at 46.3 per cent, 25.9 per cent and 19.5 per cent respectively of total industry paid claims under general insurance business. 

“Personal accident class made the highest underwriting profit of Sh712.27 million while motor private and medical classes of general insurance business incurred the highest losses of Sh1.04 billion and Sh628.58 million respectively,” the report reads in part. Claims paid in the general insurance business hit Sh16.85 billion in the first quarter of 2022, a 13.3 per cent increase compared to the same period last year where insurers paid claims worth Sh14.88 billion. “The long-term insurers’ asset base grew by 12.9 per cent in the period under review to Sh580.21 billion and largely composed of income generating investments of Sh537.83 billion. 

Claims incurred

Of the total assets, 9.5 per cent (Sh55.17 billion) was funded through shareholders’ equity,” adds the report. The reported claims incurred in the general insurance business amounted to Sh18.43 billion during the period under review. This was an increase of 10.3 per cent from Sh16.72 billion reported in the first quarter of the previous year. The high premium volume classes of general insurance business contributed the largest proportions of incurred claims; medical (42 per cent), motor private (25.5 per cent) and motor commercial (24 percent).

Motor classes of insurance business incurred claims contributed 49.5 per cent of total claims incurred compared to their contribution of 27.5 per cent of the total premium under general insurance business. The general reinsurers incurred Sh4.55 billion in claims which was a decrease of 3.8 per cent from the same period last year.

Long-term insurers hit Sh34.51 billion vs 30.77bn same time last year, a growth of 12.1 Percent General Insurance premiums amounted to Sh53.92 billion vs 48.48 billion same time last year, a growth 11.2 per cent. Industry gross written premiums in the first quarter of 2022 went up by 11 Percent to Sh88.43 billion from Sh79.26 billion in Q1 2021.

Deposit Administration and Life Assurance classes remained the biggest contributors to the long-term insurance business accounting for 34.4Percent and 25.1Percent respectively.

However, Investment income decreased to Sh9 billion by end of the quarter compared to Sh10.96 billion in Q1, 2021 which was mainly attributed to fair value loss on investments on equities in the capital market as market capitalization decreased by 6.5 Percent during the first quarter of 2022.