Underwriters made Sh226m loss in 2015: Report

Insurance companies incurred underwriting losses for general business in 2015 compared to profits the previous year, their regulator said yesterday.

The net insurance loss stood at Sh226.3 million compared to Sh2.5 billion profit the previous year. It was the third consecutive year in which underwriting profits fell by nearly half.

However investments increased by 11.2 per cent for general business, while that for life was up 10.27 per cent last year. In general insurance, the investments rose to Sh112.1 billion compared to Sh100.8 billion the year before. The size of life business in investments rose to Sh241.2 billion last year from Sh218.8 billion earned in the previous year.

GROSS PREMIUMS

According to the Insurance Regulatory Authority (IRA) report for the fourth quarter of 2015, the total gross premiums for both general and life insurance stood at Sh173.26 billion, with the latter accounting for Sh61.26 billion.

“This was a year-on-year nominal growth of 9.8 per cent over the period of one year. The premium income reported under life insurance business amounted to Sh61.26 billion, while that under general business was Sh112.00 billion,” said the report released by the IRA chief executive Sammy Makove.

The regulator noted that life underwriting in Kenya was still a small part compared to the general business, unlike in more mature markets where the former holds a larger portion of the market.

“The Kenyan insurance market continues to be largely non-life business driven unlike the world leading economies in insurance. Non-life insurance premiums contribute two thirds (64.6 per cent) of the total premiums in Kenya while life premiums contribute 35.4 per cent,” said the IRA.

The regulator said the global scene is dominated by life insurance business at 54.8 per cent and non-life insurance contributing 45.2 per cent, which the regulator termed “a more balanced position in terms of contribution by class.”