Insurance premiums cross Sh466b mark as penetration grows to 2.6pc

Kenya’s insurance industry recorded strong growth in 2025, with gross direct premiums rising 16.5 per cent to Sh466.58 billion, up from Sh400.59 billion in 2024.

This is according to the Insurance Regulatory Authority's (IRA) 2025 annual insurance industry statistics report for the year ending December 31, 2025, released yesterday.

The performance shows the resilience and expanding contribution of the insurance sector to the protection of Kenyan households, businesses and the wider economy.

Also, insurance penetration, measured as premiums as a share of Gross Domestic Product (GDP), rose to 2.63 per cent from 2.45 per cent in 2024, reaching its highest level since 2016.

Long-term (life) insurance penetration stood at 1.34 per cent, while general insurance penetration was 1.28 per cent.

Insurance density, which measures the average premium paid per person, also increased to Sh8,675, up from Sh7,573 in 2024.

The growth, IRA said, reflects increasing demand for insurance and the sector’s expanding role in strengthening household and business resilience.

Long-term (life) insurance recorded the strongest growth among the mainstream segments, with gross direct premiums increasing by 23.20 per cent to Sh236.29 billion.

The life fund carried forward, comprising assets set aside to meet policyholders’ obligations, grew by 22.90 per cent to Sh 990.27 billion, bringing it close to the Sh1 trillion mark.

Deposit administration at Sh 81.22 billion and personal pensions at Sh 24.54 billion also recorded strong growth, pointing to increased uptake of long-term savings and retirement products.

General insurance premiums grew by 9.37 per cent to Sh 224.24 billion, with medical insurance remaining the largest class and among the fastest-growing, with premiums increasing 22.30 per cent to Sh 93.20 billion.

Motor insurance continued to account for a significant share of general insurance business, with motor private premiums reaching Sh32.82 billion and motor commercial premiums Sh29. 78 billion.

Microinsurance recorded exceptional growth, with premiums increasing almost tenfold to Sh2.17 billion, from Sh 234.23 million in 2024.

The sharp increase signals growing efforts to extend affordable insurance protection to previously underserved segments of the population.

The industry continued to deliver significant value to policyholders through claims and benefits.

Total claims and policyholder benefits under long-term business increased 15.69 per cent to Sh 122.81 billion, while claims paid under general and microinsurance business rose 14.31 per cent to Sh104.47 billion.

These payments demonstrate the sector’s critical role in providing financial protection and supporting households and businesses when insured events occur.

The industry’s financial position remained strong, with total assets increasing 20.45 per cent to Sh1.51 trillion.

Investments grew by 18.87 per cent to Sh1.31 trillion, while shareholders’ funds increased by 11.01 per cent to Sh257.60 billion.

Direct insurers recorded a profit for the year of Sh22.37 billion, while reinsurers posted a profit of Sh5.28 billion. Profitability moderated from the previous year amid higher finance and service expenses.

Nairobi County continued to account for the largest share of insurance premiums at 81.1 per cent, followed by Mombasa at 3.3 per cent, Kiambu at 2.7 per cent and Nakuru at 1.8 per cent.

The concentration of premiums in Nairobi reflects the county’s dominant share of economic and commercial activity, while also highlighting significant opportunities to deepen insurance penetration and expand access across other counties.

“We remain committed to fostering a stable, innovative and consumer-focused insurance market, while supporting efforts to widen access to affordable and appropriate insurance products across the country,” said IRA Chief Executive Godfrey Kiptum.