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Insurance premiums in Kenya experienced a significant growth in the fourth quarter of 2022, reaching Sh309.7 billion, representing a 12.2 per cent increase from Sh276.06 billion reported in the same quarter of 2021.

The latest Insurance Industry Report for the last quarter of 2022, attributes the growth to the continued economic recovery from the negative effects of the Covid-19 pandemic experienced in 2020 and 2021.

“The growth is attributed to the continued economic recovery from the negative effect of Covid-19 in 2020 and 2021,” the regulator said. Long-term insurance business premiums also experienced an increase of 13.8 per cent to Sh140.84 billion compared to Sh123.71 billion in 2021.

Deposit Administration and Life Assurance classes remained the top contributors to the long-term insurance business, accounting for 35.9 percent and 25.2 percent, respectively.  The class recorded net premium income of Sh128.78 billion, representing an 11.9 per cent increase from Sh115.06 billion reported by the end of the last quarter of 2021.

Motor insurance

In the period under review, general insurance premiums amounted to Sh168.92 billion, with medical and motor insurance classes maintaining a leading position in terms of contribution at 32 per cent and 31.9 per cent, respectively.

Personal Accident and miscellaneous classes are the only classes whose premiums decreased by 2.5 per cent and 12.4 per cent, respectively.

However, general insurance business underwriting results improved significantly from a loss of Sh6.34 billion in fourth quarter of 2021 to a loss of Sh3.72 billion in fourth quarter of 2022, with workmen’s compensation class making the highest underwriting profit of Sh2.61 billion.  On the other hand, motor private, motor commercial, and medical classes incurred the highest underwriting losses of Sh4.04 billion, Sh3.54 billion, and Sh726.94 million, respectively.

“Motor classes of insurance business incurred claims contributed 48.2 percent of total claims incurred compared to their business contribution of 31.9 percent of the total premium under general insurance business,” the report explains.

Claims incurred under general insurance increased by 10.7 percent to Sh77.64 billion, with medical having the highest incurred claims at 41.9 percent, followed by motor private at 24.8 per cent and motor commercial at 23.4 per cent.

However, claims paid under general insurance increased by 12.9 per cent to Sh72.26 billion compared to Sh64 billion paid in last quarter of 2021, with medical, motor private, and motor commercial having the highest amounts of paid claims at 43.5 per cent, 24.9 per cent, and 21.9 per cent, respectively, of the total industry paid claims under general insurance business. The reinsurers’ business volume also experienced a significant increase of 26.1 per cent to Sh39.36 billion in Q4 2022 compared to Sh31.22 billion in 2021. Underwriting results also improved significantly from a profit of Sh752.26 million in Q4 2021 to a profit of Sh1.38 billion in Q4 2022.

Positive growth

The report shows a positive growth trend in the insurance industry in Kenya, with most insurance classes experiencing significant growth in premiums and profits, except for the Personal Accident and miscellaneous classes. The Covid-19 pandemic has negatively impacted the insurance industry in the past two years, but the industry’s resilience is evident in the Q4 2022 report, with a notable improvement in the underwriting results of the general insurance business. The reinsurers’ business volume also indicates that insurers are seeking more protection for their businesses, which is a positive sign for the industry’s growth.