Kenya’s Insurance Sector Continues to Boom With 12.4% in Q2’2017

The Insurance Regulatory Authority (IRA) released Q2’2017 numbers for the insurance industry in Kenya with the market recording growth in total gross insurance premiums.

According to the report, the sector recorded growth in premiums by 12.4 percent y/y to 119.2 billion shillings from 106.0 billion shillings in Q2’2016, compared to an 8.6 percent y/y growth registered the previous year.

The operating revenue for the sector grew by 6.7 percent to 93.7 billion shillings from 87.8 billion shillings. The growth was attributed to the growth of income premium by 10.4 percent to 96.0 billion shillings from 87.0 billion shillings.

The non-life insurance segment has remained dominant accounting for 64.2 percent of the total subscriptions. This was an equivalent of 74.5 billion shillings. Long-term businesses, on the other hand, contributed 35.8 percent or an equivalent of 42.7 billion shillings of the total premiums.

Operating expenses grew by 7.9 percent to 84.3 billion shillings as a result of 8.2 percent increase in claims incurred and benefits paid to 54.6 billion shillings from 50.5 billion shillings in 2016. The growth was also attributed to 7.5 percent increase in commissions and management expenses to 29.7 billion shillings from 27.6 billion shillings.

The insurance sector recorded a marginal improvement in its operational efficiency with the loss ratio declining to 56.9 percent from 58.0 percent and the expense ratio declining slightly to 30.9 percent from 31.8 percent to faster growth in premiums compared to expenses.

Total assets held by the insurance sector in Kenya increased by 12.5 percent to 564.4 billion shillings from 501.6 billion shillings in 2016 by 12.6 percent growth in investments to 450.7 billion shillings from 400.8 billion shillings.

The funds being held by the shareholders in the insurance sector grew by 6.5 percent to 141.3 billion shillings from 132.7 billion shillings in 2016 and this was attributed to the capital restructuring following the changes in the regulatory capital requirements.