Kenya’s bancassurance sector is facing profitability pressure from claims which have surged from Ksh6.6 billion in 2019 to Ksh14 billion last year.
- The Association of Kenya Insurers (AKI) in the 2024 Bancassurance report links the rapid increase in premiums to the rise in claims.
- The report shows non-life insurance sector has seen robust growth, with several companies achieving significant premium increases, signaling strong competitive positioning and market expansion.
- Motor, Fire, Medical, and Theft Insurance have emerged as the key contributors to the growth of non-life insurance in the bancassurance segment.
“This trend raises concerns about underwriting practices and claims management, particularly evident in the non-life insurance segment, where the loss ratio escalated from 43.9 per cent to 52 per cent,” AKI says in the report.
“Bancassurance has maintained a stable market presence, consistently capturing approximately 10 per cent of the overall insurance market. Its market share has shown resilience, increasing from 8.43 per cent in 2019 to stabilizing between 9.69 per cent and 9.89 per cent from 2020 to 2023. Within this framework, the general insurance segment has demonstrated steady growth, reaching 9.68 per cent by 2023,” AKI added.
Motor Insurance is leading the market with a commanding 58.6 per cent share in 2023-capitalising on the increasing demand for comprehensive vehicle coverage, driven by a rise in the number of vehicles on the road.
Among the non-life insurance products, travel and aviation recorded decline in gross written premium in 2023 compared to 2022 of Ksh2.4million and Ksh5.1 million from Ksh11.9 million and Ksh24.1million respectively.
According to AKI, the gross written premium under the motor insurance in 2023 was Ksh10.9 billion a modest increase from Ksh9.6 billion in 2022, in a year when the total gross written premium for non-life insurance products hit 18.5 billion.
The report indicates gross written premium under the fire product recorded a slight improvement last year of Ksh2.9billion from Ksh2.5 billion in 2022.
According to the survey, the life insurance under the bancassurance sector has outpaced non-life insurance, achieving an 88.6 per cent growth in gross premiums, highlighting an equally dynamic expansion in this segment.
The gross written premium in the life insurance bancassurance has grown from Ksh8.7 billion in 2019 Ksh16.5 billion in 2023. The gross written premium in 2022 was at Ksh15 billion compared Ksh12.6 billion in 2021 and Ksh10.9 billion in 2020.
According to AKI, “The growth of the life insurance sector has been largely fueled by Credit Life/Mortgage and Individual Life products. While Credit Life/Mortgage remains dominant, its market share has decreased to 62.9 per cent in 2023 from 76 per cent in 2019. In contrast, Individual Life has surged, increasing its share to 29.2 per cent from 20 per cent over the same period.”
