IRA to Delist over Half of Insurance Brokerage Firms in Kenya

The Insurance Regulatory Authority (IRA) has said that it is compiling a list of newly-licensed insurance brokerage firms in a move that will see over half of the 213 insurance firms listed lose licences.

According to IRA, the insurance brokerage firms that will be delisted have not complied with the new tough licence renewal conditions in the Insurance Act.

One of the major reasons why IRA will delist some of the firms is because most of the firms had not remitted all outstanding premiums owed to insurance firms.

The Association of Insurance Brokers Kenya (AIBK) has since confirmed that IRA had declined to renew the licences of some of its members who had not cleared outstanding premiums.

As of 2018 outstanding premiums stood at 43 billion shillings, an increase from 37 billion shillings in 2017.

The IRA points out that insurance brokerage firms accounted for 24 percent (10.68 billion shillings) of the total outstanding premiums.

Insurance penetration in Kenya reached its lowest in 15 years where penetration dropped to 2.43 percent of Gross Domestic Product (GDP) in 2018.

IRA and other industry players have partly blamed the drop in penetration on unpaid claims, with businesses and individuals remaining exposed to loss of their property and investments.

The regulatory authority’s crackdown against non-compliant brokers has been fuelled by high levels of outstanding premiums and losses experienced by businesses and individuals.

The brokerage firms have taken the matter to court following claims by the IRA that brokers are the primary cause of delayed premiums.

Brokers are now saying that the alleged amount owed in outstanding premiums is not accurate and that payment arrangements that allow corporates to pay in instalments have contributed to the situation.

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