Kenya: Insurance industry improves significantly in first quarter of 2022

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  • Insurance Regulatory Authority (IRA) has indicated that the insurance industry in Kenya continued to register improved performance in the first quarter of 2022 compared to previous quarters
  • Gross written premiums in the first quarter of 2022 went up by 11 % to KSh 88.43 billion from KSh 79.26 billion in a similar quarter in 2021
  • General insurance premiums amounted to KSh 53.92 billion. In contrast, the premium reported by the long-term insurers in the period under review hit KSh 34.51 billion

New data by the Insurance Regulatory Authority (IRA) indicates that the insurance industry in Kenya continued to register improved performance in the first quarter of 2022 compared to previous quarters.

The data, released on August 1, 2022, noted that gross written premiums among Kenyan insurance firms in the first quarter of 2022 went up by 11 % to KSh 88.43 billion from KSh 79.26 billion in a similar quarter in 2021.

During the quarter under review, general insurance premiums amounted to KSh 53.92 billion, while the premiums reported by the long-term insurers hit KSh 34.51 billion, a growth of 12.1% compared to a growth of 18.6% the previous year.

Medical and motor insurance classes maintained a leading position in terms of contribution in general insurance business premiums at 35.9% and 27.5%, respectively.

Aviation, theft, and miscellaneous classes are the only classes whose premiums decreased by 16.1%, 11.0%, and 10.6%, respectively.

Deposit Administration and Life Assurance classes remained the biggest contributors to the long-term insurance business accounting for 34.4% and 25.1%.

According to the report, the underwriting performance of the general insurance business was a loss of KSh 510.20 million, which was an improvement from a loss of KSh 1.74 billion reported in Q1 2021.

The personal accident class made the highest underwriting profit of KSh 712.27 million. In contrast, motor private and medical classes of the general insurance business incurred the highest losses of KSh 1.04 billion and KSh 628.58 million, respectively.

“The long-term insurers’ asset base grew by 12.9% in the period under review to KSh 580.21 billion and composed of income-generating investments of KSh 537.83 billion. Of the total assets, 9.5 % (KSh 55.17 billion) was funded through shareholders’ equity,” the report read.

The reinsurers’ business volume increased by 33.2% to Sh10.57 billion in the period under review compared to KSh7.94 billion same period last year, leading to an underwriting profit of Sh517.18 million from a loss of KSh 990.23 million in the first quarter of 2021.

The insurance industry asset base grew by 10.5% to Sh876.58 billion as of the end of Q1 2022 from KSh793.24 billion held at the end of Q1 2021.

A significant portion of total assets, KSh 753.70 billion (86.0%) was held in income-generating investments. Asset classes with the highest proportions of above 5% were; government securities (69.7%), investment property (11.2%) and term deposits (7.6%).

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“Total equity increased by 5.9% to stand at Sh176.48 billion as at the end of Q12022 (Q1 2021: KES 166.68 billion). The key components of shareholder’s funds were retained earnings at 35.8%, paid up capital at 33.0% and statutory reserves at 16.8%,” the report revealed.

In a related story, Jubilee Holdings Limited’s shareholders have approved a final dividend of KSh 13.0 per share, bringing the total dividend payout to KSh 14.0 (including a special dividend of KSh 5.0).

The payout follows the exceptional results posted in 2021, where the gross profit hit KSh 8.4 billion, after increasing by 66% from the KSh 5.1 billion reported in 2020.

According to the regional insurer, the performance was despite the increase of medical and life claims relating to COVID-19 cases, which was partly driven by the gain on the sale of controlling interests in the general businesses in Kenya and Uganda, transactions that were completed last year. The company retains a 34 per cent interest in both companies.

During the review period, Jubilee’s Gross Written Premium reached KSh 38.8 billion, an increase of KSh 825 million. The growth, despite the loss of the general insurance business in Kenya and Uganda, was driven by the good performance in the health and life insurance business, which grew by KSh 1.4 billion and KSj 1.2 billion, respectively.

The group’s total assets increased by KSh 9 billion to KSh 155 billion from KSh 146 billion in 2020, the largest in the industry.

During the company’s annual general meeting, Jubilee Holdings Limited Chairman Nizar Juma said the performance was backed by tight expense control measures and improved return on investments that allowed Jubilee to reinforce its leadership position in the industry.

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Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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