Kenya’s General insurance business paid claims worth $430M in three months

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  • General Insurance business paid claims worth $430 million (Sh53.25 billion) between July – September, a 13.4 precent increase compared to $379 million (Sh46.97 billion) paid in the same period last year. 
  • Medical, motor private and motor commercial had the highest amounts of paid claims at 44.5 percent. 
  • The insurers reported claims incurred amounting to $459 million (Sh56.85 billion during the period under review. 

Kenya’s General Insurance Business paid claims worth $430 million (Sh53.25 billion) between July and September, a 13.4 precent increase compared to $379 million (Sh46.97) billion paid in the same period last year.

The Insurance Regulatory Authority (IRA) Quarter 3 statistics report indicate that medical, motor private and motor commercial had the highest amounts of paid claims at 44.5 percent (Sh23.67 billion), 24.6 percent (Sh13.12 billion) and 21.5 percent (Sh11.43 billion) respectively jointly constituting 90.6 percent of all claims paid by general insurers.

The insurers reported claims incurred amounting to Sh56.85 billion during the period under review. This was an increase of 10.8% from Sh51.30 billion reported in the third quarter of the previous year.

The high premium volume classes of general insurance business contributed the largest proportions of incurred claims, that is, medical $193 million (Sh23.90 billion), motor private $114 milllion (Sh14.15 billion) and motor commercial $105.8 million Sh13.10 billion.

“Motor classes of insurance business incurred claims contributed 47.9% of total claims incurred compared to their business contribution of 29.4% of the total premium under general insurance business,” the report states.

During the quarter under review, general insurance premiums amounted to $1 billion (Sh134.41 billion ). Medical and motor insurance classes maintained a leading position in terms of contribution in general insurance business premium at 32.8 percent  and 29.4 percent respectively.

Personal Accident and miscellaneous classes are the only classes whose premiums decreased by 4.5% and 2.7% respectively.

The underwriting performance of the general insurance business was a loss of $18.2 million Sh2.26 billion which was an improvement from a loss of $33 million KES 4.13 billion reported in Q3 2021.

Workmen’s compensation class made the highest underwriting profit of $20 million (Sh2.48 billion) while motor private, motor commercial and personal accident classes of general insurance business incurred the highest underwriting losses of $23 million (Sh2.89 billion),  $14.1 million (Sh1.75 billion) and $7 million Sh868.74 million respectively.

Overall Insurance industry reported claims  in July to September 2022 declined by 12  percent  to 1.8 million compared to 2 million reported in the second quarter of 2022. 

The Insurance Regulatory Authority (IRA) Quarter 3  Claims  report  indicates that during the quarter, General insurance business claims reported were 1,705, 020 compared to 1,965,735 reported in Q2, 2022 in the previous quarter. 

Long-term Insurance claims reported hit 106,121 an increase compared to 99,678 reported in the second quarter of 2022. 

Consequently claims paid in relation to the total number of claims actionable during the quarter went up in the general insurance business. 

“In the period under review the claims payment ratio for general liability claims increased to 10.6 percent  (Q2 2022: 7.4%). The claims payment ratio for general non-liability claims increased to 75.5% in Q3 2022 from 75.3 percent  in Q2 2022,” the report states. 

The claims payment ratio for the long-term insurance business however, decreased to 73.3 percent  compared to 75.7 percent  observed in the previous quarter.

Claims paid during the quarter decreased by 9.6 percent to  1.79 million compared to 1.98 million paid in the Q2, 2022.  General Insurance business liability claims paid were 12,055 compared to 10,709 paid in the previous quarter while General Insurance non liability claims paid hit 1.68 million from 1.87 million paid in the previous quarter. 

On the other hand, 101, 329 Long-term insurance business claims were paid during the quarter, compared to 104, 574 in Q2, 2022. 

During the same period, the proportion of general business liability claims closed as no claims decreased to 1.3 percent  compared to 3.0 percent  observed in Q2 2022. The proportion of general  business non-liability claims closed as no claims decreased to 0.5% in Q3 2022 from 0.7 percent  in Q2 2022.

The proportion of long-term insurance business claims closed as no claims decreased to 0.41 percent  in Q3 2022 from 0.65 percent  in Q2 2022.

Both long term and general insurance business underwriters are required to submit monthly summary of claims returns to IRA through the electronic regulatory system (ERS). These returns are submitted within 15 days from the end of the month to which they relate.

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