IRA: Complaints against insurers rise as Monarch tops shame list

Insurance Regulatory Authority chairman Mwambu Mabonga. [Wilberforce Okwiri, Standard]

Three insurers accounted for more than a third of all complaints that consumers lodged against the insurance sector in the first quarter of this year. 

A new report by the Insurance Regulatory Authority (IRA) shows that complaints against Monarch Insurance, Corporate Insurance Company and Trident accounted for 35.6 per cent of the complaints against the industry.

Of the 522 complaints that policyholders and insurance beneficiaries reported to IRA, a total of 83 were against Monarch Insurance’s general business.

There were 63 complaints against Corporate Insurance, of which 36 were about its long-term insurance business and 27 against its general insurance. There were 40 complaints against Trident’s general insurance business.

“The Authority registered 522 complaints in the first quarter of 2023. General insurance business accounted for 79.1 per cent of the complaints whereas 20.9 per cent were made against long-term insurers,” said IRA, which has a mandate to protect the interests of insurance policyholders and beneficiaries in insurance contracts.

“Over the period under review 125 (30.3 per cent) complaints against General insurers were resolved while 53 (48.6 per cent) complaints against long-term insurers were resolved.”

The number of complaints against insurers went up over the quarter from 502 reported over the first three months of 2022.

The IRA report also showed that the industry assets increased by 14.1 per cent to hit Sh1 trillion against industry liabilities of Sh815.50 billion. This resulted in a net asset of Sh184.97 billion.

The sector’s gross premium income grew by 14.8 per cent in the first three months of the year, rising to Sh104.5 billion compared to Sh88.4 billion in the same quarter last year.

IRA attributed the growth to the continued economic recovery from the negative effect of Covid-19 in 2020 and 2021.

The income has been rising for the past three years, rising from a five-year low of Sh79.3 billion in the first quarter of 2021.

Long-term insurance business premiums amounted to Sh38.97 billion, accounting for 38.4 per cent of the total industry premium, while general business premiums amounted to Sh62.52 billion (61.6 per cent).

This is an improvement compared to the Sh34.5 billion registered in a similar period last year, which represented 18.6 per cent of sector premiums. 

The amount was lower, at Sh30.7 billion or 12.1 per cent of total industry earnings in a similar quarter in 2021.

Investment income (revenue account, and profit and loss account) under the long-term insurance business increased to Sh14.38 billion during the quarter under review compared to Sh9 billion previously.

The general insurance business recorded an investment income of Sh2.98 billion during the period compared to Sh2.5 billion last year.

Under the general insurance business, workmen’s compensation gross premium income had the highest growth at 64.1 per cent from Sh3.19 billion reported in the first quarter of 2022 to Sh5.23 billion reported this year..

Personal accident had the largest decline from Sh1.07 billion recorded in 2022 to Sh972.67 million in the quarter under review.

The high premium volume classes of general insurance business contributed the largest proportions of incurred claims - medical Sh8.72 billion (40.5 per cent), motor commercial Sh5.29 billion (24.6 per cent) and motor private Sh4.99 billion (23.2 per cent).

Medical, motor private and motor commercial continued to dominate claims, accounting for 40.9 per cent(Sh8.25 billion), 24.9 per cent (Sh5.02 billion) and 23.1 per cent (Sh4.65 billion) respectively of total industry-paid claims under general insurance business.

The underwriting performance of the general insurance business reported a loss of Sh2.01 billion, which was a decline of 294.7 per cent from a loss of Sh510.20 million reported in the same quarter last year.

However, the general reinsurers' underwriting performance recorded a profit of Sh487.8 million, having dropped Sh517.18 million in the corresponding quarter last year.