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Kenya’s insurance sector witnessed a significant growth in the fourth quarter of 2023, with the Gross Written Premium increasing by 16.7 per cent to Sh361.4 billion up from Sh309.8 billion in the same period the previous year.

Insurance Regulatory Authority (IRA) report for January to December 2023 revealed that the general insurance business remained the dominant contributor to the industry’s insurance premium, accounting for 52.9 per cent of the total premium.

Notably, Motor and Medical insurance classes made up 63.1 per cent of the gross premium income under the general insurance business. The review period also saw an increase in investment income, which rose by 14.8 per cent to Sh54.65 billion by the end of the quarter.

The Medical, Motor Private, and Motor Commercial classes of insurance business recorded the highest paid claims. By the end of Q4 2023, the total Gross Premium Income (GPI) reported under long-term insurance business reached Sh170.02 billion, marking a significant growth of 20.7 per cent.  This was a notable increase compared to the 13.8 per cent growth observed in Q4 2022, when the GPI stood at Sh140.84 billion.

Total investments

The Deposit Administration and Life Assurance classes continued to be the major contributors to the long-term insurance business GPI, accounting for 37.1 per cent and 22.7 per cent respectively.

As of the end of December 2023, total investments in the long-term insurance business reached Sh695.42 billion, marking a 14.9 per cent increase from the Sh20 billion reported at the end of Q4 2022.

A significant portion of these investments was directed towards Kenyan government securities, including treasury bills and bonds.  These securities remained a popular choice for long-term insurers, accounting for 75.3 per cent or Sh523.51 billion of the total investments in the long-term insurance sector.

During the fourth quarter of 2023, the total amount of general insurance premiums reached Sh191.34 billion.

The medical and motor insurance classes continued to be the leading contributors to the general insurance business premium, accounting for 34.7 per cent and 28.8 per cent respectively. However, the Engineering class was the only one to experience a decrease in premium, with a decline of 12.1 per cent. The reinsurance business volume saw a decrease of 4.7 per cent during the year, dropping from Sh34.31 billion in 2022 to Sh32.77 billion in 2023.

In the fourth quarter of 2023, the Insurance Fraud Investigation Unit (IFIU) reported a total of 56 suspected insurance fraud cases. The nature of these cases varied, with the most significant increase observed in the issuance of fake motor vehicle insurance certificates, which rose from zero cases in Q4 2022 to 10 cases during the same period in 2023.

Fraudulent motor accident/electrocution injury claims also saw an increase, rising from eight to 12 cases. 

Other notable cases included theft by agents, which increased from six to nine cases, and fraudulent funeral/death/medical claims, which rose from three to four cases.

However, cases of obtaining money by false pretenses decreased from six to two. New types of fraud were also reported, including impersonating IRA officials and fraudulent last expenses.

According to the report, the exposure of the industry to capital market investments, specifically quoted shares, has been on a downward trend. It fell from 2.8 per cent in the fourth quarter of 2022 to 2 per cent in the same period in 2023.