Unpacking Kenya’s insurance industry in the second quarter

Unpacking Kenya’s insurance industry in the second quarter

By Soko Directory Team / Posted on October 11, 2022 | 9:45 a.m.

Investment income in the insurance sector decreased by 37.0% to Ksh 16.6 billion in Q2’2022, compared to Ksh 26.3 billion recorded in Q2’2021 for insurance companies term, and also decreased by 26.5% for general insurance businesses to Ksh 4.6 billion, from Ksh 6.3 billion recorded in Q2’2021.

The declines are attributed to fair value losses on equity investments listed on the capital market, as evidenced by declines in the NASI, NSE 25 and NSE 20 which posted losses of 25.2%, 21.0 % and 15.2%, respectively, at the end of Q2’2022.

Net claims from the long-term insurance business increased by 4.7% to Ksh 41.3 billion from Ksh 39.4 billion in Q2 2021, mainly due to requests from individuals seeking access to their retirement benefits given the reduction in their disposable income.

On the other hand, net premium income for long-term business increased by 8.2% to Ksh64.3 billion in Q2’2022 from Ksh54.7 billion in Q2’2021.

General business net claims increased by 14.5% to Ksh 37.0 billion from Ksh 32.4 billion in Q2 2022, driven by medical claims growth of 44.4% at 15 .5 billion Ksh in Q2’2022, compared to 12.0 billion Ksh in Q2’2022. Net premiums, on the other hand, increased by 12.3% to Ksh 54.4 billion from Ksh 48.5 billion in the second quarter of 2021.

The long-term business loss ratio decreased by 8.0% to 64.2%, compared to 72.2% recorded in Q2 2021, thanks to a 17.8% increase in net premiums compared to an increase of 4.7% of net claims in Q2 2022. .

Notably, the P&C business claims ratio increased to 68.1% in Q2 2022, from 66.8% in Q2 2021, due to a 14.5% growth in incurred claims which exceeded the 12.3% growth in income net of earned premiums,

The combined ratio of P&C insurance activities decreased by 4.7% points to 102.7% in Q2’2022, compared to 107.4% recorded in Q2’2021, but 0.8% more than the 101.9 % recorded in Q1’2022.

The increase in the combined ratio is mainly attributable to the increase in the loss ratio, which increased by 1.3% to 68.1% in Q2’2022, compared to 66.8% in Q1’2021, coupled with an increase 0.5% of the commission expense rate to 7.0%, compared to 6.5% in Q2 2021.

The general insurance business recorded an underwriting loss of Kshs 1.49 billion in Q2’2022, down 2.1% from the Kshs 1.46 billion recorded in Q2’2021.

The decline in underwriting performance was driven by a 14.5% increase in net incurred claims to Ksh 37.0 billion from Ksh 32.4 billion in Q2 2021 compared to a relatively smaller increase of 12.3 % of net premiums earned at Ksh 54.4 billion, compared to Ksh 48.5 billion recorded. in Q2’2021.

Importantly, the Workmen’s Compensation category earned the highest underwriting profit of Kshs 1.5 billion during the quarter, while the Private Motor and Medical categories of the General Insurance business suffered. highest losses of Kshs 2.4 billion and Kshs 0.9 billion respectively.

About the Soko Directory Team

Soko Directory is a Financials and Markets digital portal that tracks brands, NSE-listed companies, SMEs and trendsetters in the markets ecosystem. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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