General insurance claims ease as sector shows signs of recovery

Godfrey Kiptum, CEO of the Insurance Regulatory Authority (IRA) speaking during an event to formally announce the strategic partnership between Prudential and Standard Chartered Bank. [Wilberforce Okwiri]

The Insurance sector in Kenya has recorded strong growth and stable business in all its segments in the second quarter of 2025.

The growth has been attributed to macroeconomic stability, adoption of digital distribution channels and also innovative product development.

According to the sector's performance report released by the Insurance Regulatory Authority (IRA), gross written premiums in the long-term insurance sector rose to Sh110.39 billion, marking a strong 17.7 per cent growth compared to the same quarter in 2024.

The authority reported steady growth in long-term insurance, stability in general insurance, and mixed results in reinsurance during the review period.

Godfrey K. Kiptum, Commissioner of Insurance and IRA's Chief Executive Officer, noted that the results of quarter two of 2025 reflects resilience and steady growth in the insurance sector, particularly in the long-term business.

"While challenges remain certain in general insurance business classes and reinsurance business, the authority is encouraged by the industry's improving claims ratios and strengthening asset base," he said.

In the period under review, the asset base of long-term insurers expanded significantly by 22.6 per cent to Sh977.50 billion, of which income-generating investments stood at 95.5 per cent and accounting for Sh933.82 billion.

"Shareholders' funds were Sh93.69 billion, representing a 9.6 per cent of the total assets, reflecting strong capitalisation in the segment," IRA reported.

The general insurance business recorded gross premium income of Sh129.88 billion with underwriters incurring claims worth Sh55.06 billion, translating to 73 per cent of the incurred losses.

This ratio is an improvement from 76.5 per cent recorded in the same period in 2024.

"The moderation of the loss ratio signals a degree of recovery in underwriting performance despite continued pressure from high claims in medical and motor insurance classes," the IRA report showed.

Long term Reinsurance net income grew 22.1 per cent, from Sh1.97 billion in 2024, to Sh2.40 billion.

According to the report, the growth was largely supported by Group Life business, which contributed 94.7 per cent of the total net premium income during the review period.

General reinsurance segment. However, recorded a decline in gross premium income, recording Sh17.04 billion, down from Sh18.38 billion recorded in the same quarter last year.

The authority has projected that the industry prospects remain positive, supported by continued macroeconomic stability, adoption of digital distribution channels, and innovative product development.

It has reported that the sector, despite recording growth, is faced with challenges such as high claims costs in medical and motor insurance, declining reinsurance margins and low overall insurance penetration persist.