Kenya’s insurance sector experienced significant growth in the fourth quarter of 2023, with the Gross Written Premium (GWP) increasing by 16.7 percent to Sh361.4 billion, up from Sh309.8 billion in the same period the previous year.
According to the Insurance Regulatory Authority (IRA) report for January to December 2023, the general insurance business remained the primary contributor to the industry’s premium, accounting for 52.9 percent of the total premium.
Within the general insurance business, Motor and Medical insurance classes made up 63.1 percent of the gross premium income. The review period also saw a rise in investment income, which increased by 14.8 percent to Sh54.65 billion by the end of the quarter.
The highest paid claims were recorded in the Medical, Motor Private, and Motor Commercial insurance classes.
By the end of Q4 2023, the total Gross Premium Income (GPI) reported under long-term insurance business reached Sh170.02 billion, marking a significant growth of 20.7 percent. This was a notable increase compared to the 13.8 percent growth observed in Q4 2022, when the GPI stood at Sh140.84 billion.
Kenya’s insurance sector witnessed substantial growth in Q4 2023, with total investments in the long-term insurance business reaching Sh695.42 billion, a 14.9 percent increase from the previous year.
The Deposit Administration and Life Assurance classes were major contributors to this growth, accounting for 37.1 percent and 22.7 percent of the Gross Premium Income (GPI), respectively.
A significant portion of these investments was allocated to Kenyan government securities, such as treasury bills and bonds, which remained a popular choice for long-term insurers. These securities accounted for 75.3 percent (Sh523.51 billion) of the total investments in the long-term insurance sector.
During Q4 2023, the total general insurance premiums amounted to Sh191.34 billion. The medical and motor insurance classes continued to lead the general insurance business premium, contributing 34.7 percent and 28.8 percent, respectively.
However, the Engineering class saw a decline in premiums, dropping by 12.1 percent. Additionally, the reinsurance business volume decreased by 4.7 percent, from Sh34.31 billion in 2022 to Sh32.77 billion in 2023.
The Insurance Fraud Investigation Unit (IFIU) reported a total of 56 suspected insurance fraud cases in Q4 2023. The most significant increase was in the issuance of fake motor vehicle insurance certificates, which rose from zero cases in Q4 2022 to 10 cases in Q4 2023.
Fraudulent motor accident/electrocution injury claims also increased from eight to 12 cases. Other notable fraud cases included theft by agents, which increased from six to nine cases, and fraudulent funeral/death/medical claims, which rose from three to four cases.
Conversely, cases of obtaining money by false pretenses decreased from six to two. New types of fraud, such as impersonating IRA officials and fraudulent last expenses, were also reported.
According to the IRA report, the insurance industry’s exposure to capital market investments, specifically quoted shares, has been declining. It fell from 2.8 percent in Q4 2022 to 2 percent in Q4 2023.
