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AAR Insurance diversifies into motor vehicle cover after nod
Absolute speeds are not the issue. The difference in speeds is. And on that count, “too slow” is probably a root cause of as many or more accidents than too fast.
Medical underwriter AAR Insurance has received regulatory nod to begin offering motor vehicle cover, marking a diversification move into a segment where many insurers have historically recorded underwriting losses.
AAR, which began operations in 1984 as a rescue and emergency services company before transitioning into an insurer in 2012, now targets coverage for motorists in a highly competitive market segment.
Justine Kosgei, chief executive officer of AAR Insurance Kenya, said in an interview that the insurer received its motor insurance licence from the Insurance Regulatory Authority (IRA) about three months ago and is about to roll out the products.
“We have seen interest from the businesses that were already giving us medical insurance business and that is a good point to start,” said Mr Kosgei.
Motor insurance is the second largest class of general insurance in Kenya after medical, having given the industry gross written premiums of Sh55.98 percent after Sh76.31 billion from medical in the year ended December 2024.
However, it has been delivering underwriting losses over time, with insurers relying on investing the premiums for a return to post-profits. AAR will start with private motor insurance and hopes to tap into its base of medical insurance customers for car covers. Mr Kosgei said AAR is targeting discounted premiums for clients who can buy both medical and car insurance.
“We’re committed to doing it right. We want to bring the same level of care found in our medical insurance into car insurance. Customers with our medical cover will enjoy discounted motor insurance rates,” he said.
Official data shows Kenya has witnessed a near doubling of registered motor cars in 10 years to 2023, with the number jumping to 1.39 million in 2023 from 779,256 in 2013. This presents a business opportunity for insurers.
Private motor insurance returned an underwriting loss of Sh3.06 billion last year, a growth from Sh2.6 billion a year earlier.
During the same period, underwriting losses from insuring commercial vehicles were Sh3.04 billion, an improvement from Sh3.31 billion in the prior year.
AAR is the seventh-largest general insurer in Kenya. The insurer collected premiums worth Sh10.96 billion in the financial year ended December 2024, giving it a 5.37 percent market share.
The insurer’s key class of insurance is medical where it closed last year with a market share of 14.12 percent worth Sh10.77 billion, making it the third largest health insurer after Jubilee Health (18.26 percent) and Old Mutual (15.57 percent).
AAR medical insurance premium made up 98.3 percent of the insurer’s gross written premiums at the end of last year, leaving other classes—engineering, for domestic, liability, marine, personal accident, theft, workmen’s compensation, and miscellaneous covers—with Sh185.72 million.
