The Unconscious Contradictions Of Kenyan Insurance

By Mwenda Kimathi

Around nine years ago, as a fledgling analyst new to the industry, I made a bold claim that in five years Long-Term Insurance (LT) will overtake General Insurance (GI).

At the time, GI was sitting pretty at 1.5 times the size of LT, but the latter had growth, consistently outpacing GI. Fast forward and the IRA’s Q3 2025 sectoral report now places the comparative factor at 1.1, indicating that parity is approaching fast. My five-year estimation, admittedly, was a bit ambitious, but the LT – GI “flippening” in my opinion, will materialize by 2027.

My next big call is more near-term; I predict that GI will experience its worst underwriting results on record in 2025. Granted, my “prediction” is actually a retrodiction, but I say this because the Industry’s full year (Q4) reports are usually disseminated around the second half of the following year, hence my Janus-esque forward-looking-hindsight.

The IRA’S Q3 report, however, supports my bombast, reporting a staggering KES 7.8 billion underwriting loss for GI, an almost outlandish 393% year-on-year increase in losses from the KES 1.6 billion recorded in Q3 of 2024. Put into perspective, Q3 losses from 2022 to 2024 combined were KES 7.9 billion; Q3 2025 alone was only shy of that by KES 118 million. As disclosed in the report, GI premiums grew by 9.2% while claims went up 14.7%, rising approximately 1.6 times faster than premiums. Roughly put, for every 100 bob of additional premiums, general insurers are shelling out 160 bob in additional claims. Furthermore, despite the furor on automation and AI, GI direct expenses grew by 19.7%, piling even more pressure on tepid top-line growth.  Reaching across the aisle to my actuarial colleagues and their penchant for outlier testing, I must stress that GI has recorded underwriting profits only once in the last 13 years, making GI profitability, rather ironically, the outlier rather than the norm.

In comparison, the LT industry is living in a veritable oasis. As of Q3 last year, LT insurers posted a 12.5% gross premium growth, buffeted by a whirlwind 61.3% growth in investment income, which stood at KES 103.4 billion; although this surge can be attributed to strengthened capital markets and favorable pension regulations. Putting into context this truly astounding fete, LT’s investments can comfortably cover their entire claims book (KES 97.7 billion) with room to spare. For comparison, GI investment income (KES 15.9 billion) can only cover 19.1% of its underwriting loss. Granted, similar to GI, LT recorded a 21% increase in direct expenses and a 24% increase in claims and policyholder benefits, but with LT also enjoying its strongest retention rate of the past 6 years (94.5% compared to GI’s 69.8%), the contrast in fortunes of our two protagonists is indisputable.

The 2025 Insurance Sub-Sector Report by FinAccess and IRA affirms this line of thought, indicating that despite the diverging insurance access and usage trend, the two facets share cost as an underlying factor. According to the report, 76.2% of respondents cited cost as their most significant barrier to access while 61.4% indicated their biggest impediment to usage is affordability. Fate, as opined by the ancients, loves irony, so amidst an industry grappling with rising costs, the cost of the industry’s service de facto, is the industry’s largest growth inhibitor.

Now despite my borderline visceral tone, I am in no way trying to chastise our beloved insurance industry.  What I am lamenting is the casual disregard for basic self-scrutiny at the expense of lofty futurisms. To sum up this antithesis, IRA’s Q3 2025 report showed that new products developed grew threefold, from 15 the previous year to 45, more than the last 5 Q3s combined. However, menacingly, reported fraud cases at the Authority shot up from 15 to 57 year-on-year, the highest recorded for such a period in over five years.

As we await the industry’s final reports and as 2026 gathers momentum, perhaps it is time we revisit the paradox with which we began: access to insurance is declining even as usage rises. This is not anomalous and is a signal that the industry is wrestling with contradictions it has yet to reconcile. On one hand, we innovate relentlessly, creating new products, digital platforms and AI-driven underwriting. On the other, the fundamentals remain stubbornly unresolved, among them rising claims, mounting fraud, structural inefficiencies and a widening affordability gap for the very public we seek to insure. In this sense, referencing Carl Jung’s theories of analytical psychology, the industry can be described as an “unconscious psyche”, one that advances confidently in some directions while quietly repressing inconvenient truths in others.

Jung argued that true development requires a reconciliatory integration, where the conscious acknowledgement of the shadow (structural tensions we prefer not to address) is noted. For our industry, that shadow is the recognition that many of our structural problems are endemic and interwoven. If the next decade is to belong to insurance, it will be because we summoned the intellectual honesty to confront our contradictions and reconcile them. Only then will the industry truly “make straight the way” for the future it so eagerly awaits.

Read Also: Kenya’s Insurance Industry Needs A Genuine Shift In How It Thinks About Claims

The writer is the Head, Centre for Innovation and Analytics (CIA) at Minet Kenya Insurance Brokers