IRA; insurance industry records growth in insurance premiums

IRA chief executive report indicates that the industry’s total revenue recorded Sh1.75 billion in the financial year in relation to Sh1.65 billion in the preceding financial year. [Photo: Courtesy]

Insurance Regulatory authority says total insurance premiums from the industry grew at 6.3 percent to a Sh209 billion mark in 2016/2017 financial year.

The industry recorded the highest mark in the year despite the prolonged electioneering period which almost brought the economy down.

Total premiums recorded in 2016 were Sh196.64 billion which is less Sh12.83 billion margin in 2017 where premiums raised amounted to Sh209 billion representing Sh13.64 billion profit margin.

IRA chief executive report indicates that the industry’s total revenue recorded Sh1.75 billion in the financial year in relation to Sh1.65 billion in the preceding financial year.

According to the report, Kenyan insurance sector remains stable with a 12.6 percent growth representing 4.3 percent growth in real terms even as general business insurance recorded a high of 2.5 percent representing -5.1 percent decline in growth on real terms.

Insurance Industry Annual Report for the year ended December 31, 2017 states that the industry’s base asset increased by 11.8 percent to realize Sh590.59 billion in 2017 as compared to Sh528.75 billion recorded in 2016, with investments dominating the asset base at 81.9 percent to Sh483.80 in 2017 from Sh425.30 billion in the year 2016.

Gross Direct Insurance Premiums remained stagnant at 2.7 percent compared to the Africa’s average of 3.0 percent with insurance density increasing from Sh4,300 to sh4,455 in 2016 and 2017 respectively.

Swiss Re Sigma 2018 report says that Africa’s life insurance deteriorated with a slight change of 0.3 percent in real terms to $44.9 billion, non-life insurance went up by 1 percent in real terms to $21.8 billion.

The report further states, global insurance premiums increased by 1.5 percent to nearly $5 trillion while Global life premium augmented by 0.5 percent in real terms to $2.7 trillion while that of non-life premium increased by 2.8 percent in real terms to $2.2 trillion.

The trend has been associated with increased consumer education, industry stability, good consumer protection policies, industry’s capacity development and provision of quality customer care services.

The authority operations are financed by the insurance premium levy paid by subscribers (insurers).