According to the Association of Kenya Insurers (AKI), the insurance industry grew 6.5 per cent in the year ended December 31, 2017, compared to 13.4 per cent in 2016. However, positive growth was noted in insurance premiums which rose in 2017 to Sh209 billion compared to Sh197 billion in 2016.
Speaking at the launch of the annual statistics report on 30 August, AKI executive director Tom Gichuhi said:
“We witnessed a prolonged electioneering period in 2017 and this slow growth was not unique to the insurance industry.”
The Statistics
Net claims to policyholders stood at Sh99.13 billion compared to Sh85.41 billion in 2016 while insurance penetration dropped from 2.71 per cent compared to 2.75 per cent in 2016.
Marine insurance saw the highest growth of 41.56 per cent thanks to the government’s directive to locally insure all marine cargo starting 1 January 2017. Engineering insurance recorded the second highest growth of 15.84 per cent which was attributed to the increased infrastructural projects in the country.
“Agriculture insurance also performed well with an increase in gross written premium to Sh822.7 million in 2017 compared to Sh548 million in 2016. Livestock insurance accounted for 63.13 per cent of this premium. Government premium subsidies for crop and livestock insurance for the year 2017 was Sh157 million and this figure is expected to increase in 2018,” AKI wrote in a statement.
Personal accident insurance, motor commercial insurance, and medical insurance posted negative growth during the period at -9.08 per cent, -3.33 per cent, and -0.71 per cent respectively. Medical claims surged 14.64 per cent to Sh20.56 billion in 2017 compared to Sh17.94 billion in 2016.
Life insurance contributed to 40 per cent of the total premium written by the industry at Sh83.65 billion with pension schemes being the best performing life insurance category at 3 per cent. Group life came second at 29.75 per cent.
Upcoming Regulatory Changes
The insurance industry is required to adjust in accordance with the regulatory changes proposed in the Budget Statement this year. The proposals include amending the Insurance Act and complying with the risk-based capital requirements by June 2020 and the IFRS rules.
