Inside Politics

Insurers post 19pc jump in premiums for Q2, 2021

Wednesday, September 22nd, 2021 00:00 |
Insurance Regulatory Authority (IRA). Photo/Courtesy

Insurance premiums increased by 19 per cent in the second quarter of 2021 to hit Sh144.02 billion from Sh121.04 billion in the second quarter of 2020, latest data from the Insurance Regulatory Authority (IRA) shows.

General insurance business remained the largest contributor to the industry, contributing 59.3 per cent of the total premiums equivalent to Sh85.36 billion, while long-term insurance premiums stood at Sh58.66 billion in the period under review. 

According to the data, general insurance business underwriting results reduced significantly from a marginal profit of Sh62.45 million in in the second quarter of 2020 to a loss of Sh1.46 billion in quarter two of 2021.

This was attributed to high increase in loss ratios due to relaxation of restrictions that had been imposed on travel due to Covid-19 pandemic. 

Claims incurred in the general insurance business amounted to Sh32.38 billion during the period under review, a 15 per cent increase from Sh28.08 billion reported in the second quarter of the previous year.

“The high premium volume classes of general insurance business contributed the largest proportions of incurred claims; medical (38.7 per cent), motor private (29.8 per cent) and motor commercial (22.8 per cent),” states the report. 

Motor classes of insurance business, on the other hand, comprised of 52.7 per cent of total claims incurred compared to their contribution of 27.8 perc ent of the total premium under general insurance business.

Highest amounts

Claims paid increased by 16.9 per cent to Sh30.60 billion compared to Sh26.17 billion paid in the second quarter of 2020. 

Medical, motor private and motor commercial had the highest amounts of paid claims at 39.3 per cent, 26.9 per cent and 21.5 per cent respectively of total industry paid claims under general insurance business. 

In the period under review, UAP Insurance maintained the market lead under the general insurance market with 8.6 per cent market share followed by CIC General Insurance and GA Insurance at 8 per cent and 7.7 per cent respectively.

On the other hand, companies in the long-term business made Sh54.57 billion, a 22.9 per cent increase from Sh44.4 billion reported by the end of the second quarter of 2020.

In the long-term business, Britam Life Assurance maintained its lead, with 21.3 per cent market share followed by ICEA LION Life Assurance at 16.2 per cent and Jubilee Insurance with 11.5 per cent market share in the period under review.

According to the report, total net premium income reported by long term reinsurance companies in in the second quarter of 2021 declined marginally by 0.9 per cent to Sh1.5 billion compared to Sh1.52 billion reported in a similar period last year.

 General reinsurers reported an increase in the net premium income of 13.4 per cent from Sh10.73 billion reported by the end of quarter two of 2020 to Sh12.17 billion this year.

IRA says the industry’s asset base grew by 11 per cent to Sh819.65 billion as at the end of the second quarter of 2021 from Sh738.72 billion held as at end of a similar period last year.

The report states that a significant portion of total assets Sh698.05 billion equivalent to 85.2 per cent were held in income generating investments.

More on Inside Politics