NAIROBI, Kenya, Apr 13 – AAR Insurance has posted Sh517 million in net profit for the year ended 2019, up from a loss of Sh253 million recorded the previous year.
The insurer has attributed the improved performance to a significant reduction in claims ratio during the period.
Net claims fell from Sh3.3 billion in 2018 to Sh1.7 billion last year as a result of enhanced efficiency in claims management.
This was majorly driven by improvement in technology and efficiency in claims processing which led to reduction in claims incurred compared to prior year.
Profit before tax also climbed to Sh756 million from a loss of Sh334 million in 2018. This is a result of growth in revenue, commission earned from reinsurance arrangement, efficient claims management and savings on management expenses.
Gross Written Premiums increased by 4.5 percent from Sh5.6 billion to Sh5.9 billion while operating expenses declined from Sh1.1 billion in 2018 to Sh1.08 billion.
Income from fees and commissions rose from Sh32 million to Sh586 million owing to new reinsurance arrangements placed.
Total assets rose from Sh3.9 billion to Sh4.8 billion, a 24 percent increase, with shareholders’ funds increasing from Sh563 million to Sh1.1 billion during the period under review.
AAR Insurance Kenya Managing Director Nixon Shigoli attributed the overall improved performance to a realignment of the business to focus on enhanced efficiency, product innovation and expanding into new market segments.
“Our relentless focus on operational efficiency, tightening claims management, and exploiting new opportunities in the market is paying off. Going forward, we will be expanding our customer relationships, enhancing the client experience and deepening innovation in our distribution ecosystem,” said Shigoli
AAR Insurance was last year named the most profitable underwriter in the general insurance category by the Insurance Regulatory Authority after it scored the lowest claims ratio in the industry at 37.7 percent.
Apart from enhancing business efficiency, Shigoli said AAR Insurance is expanding its business portfolio by targeting under-served markets like small and medium enterprises (SMEs) and microinsurance.