NAIROBI, Kenya, Aug 28 – Medical and motor classes in the insurance industry continue to be the main drivers of the sector contributing 63 percent of the total gross premiums in 2013, hitting Sh130.65 billion in 2013 compared to Sh108.54 billion in 2012.
According to the Annual Insurance Industry Report by the Association of Kenya Insurers (AKI), motor insurance accounted for 39 percent of total gross premiums or Sh33.8 billion including commercial and private, while medical class recorded a 24 percent or Sh20.8 billion of the total premiums.
At the same time medical insurance recorded the highest growth of 59 percent to Sh21 billion from Sh13 billion in 2012.
“The growth of the medical class was exceptionally high because of newly licensed medical insurance underwriters who were not included in 2012,” AKI Chairman Justus Mutiga said while commenting on the report.
The two classes are under the general insurance or Non-Life segment which recorded a gross premium worth Sh86 billion compared to Sh71.4 billion in 2012. Other classes include fire, work injury benefit, personal accident, marine, theft and aviation.
The life insurance business on the other hand recorded a premium income of Sh44 billion up from Sh37 billion in 2012. The segment carries the ordinary life, group life, pension business and investment contracts.
Meanwhile, claims increased to Sh34 billion in the year under review from Sh29 billion in 2012 with medical insurance recording the highest loss of 75 percent or Sh9.6 billion followed by motor private at 70 percent, equivalent to Sh9 billion.
“As the industry grows in terms of premiums, the more claims we get because in any case that is our work. There is now way premium would grow and claims remain stagnant. However we are also here to do business and we are working to ensure that we pay genuine claims,” Mutiga said.
Total expenses in the insurance industry amounted to Sh20.9 billion compared to Sh17 billion in 2012.
The task ahead for AKI is to continue creating awareness of the importance of insurance covers to Kenyans following a continued slow uptake of insurance product in the country.
The overall insurance penetration grew marginally from 3.4 percent from 3.1 percent.
“The low penetration highlights the significant opportunities that exist in the Kenyan insurance market especially in commercial lines such as oil, real estate and infrastructure,” Mutiga said.
The industry made a net a profit of Sh14.5 billion from Sh11.6 billion.