Time flies with great content! Renew in to keep enjoying all our premium content.
General insurers’ profit rises four times
Mwambu Mabonga at the IRA's Upper Hill office on February 16, 2023. President Ruto has revoked his appointment as the chairman of the Insurance Regulatory Authority (IRA). PHOTO | DIANA NGILA | NMG
General insurers’ net profit for the first three months of the year rose four times to Sh1.6 billion as increases in investment income helped to offset the poor performance from the underwriting business.
The latest data from the Insurance Regulatory Authority (IRA) shows the net profit rose from Sh399.3 million posted in a similar period in 2022, marking one of the best first-quarter performances in years.
The review period saw investment income rise 21 percent to Sh2.98 billion from Sh2.45 billion while net earned premium increased by 9.9 percent to Sh29.9 billion.
Net premiums earned refers to the total amount of premiums an insurer considers as belonging to it depending on how much time has passed on the policy to its effective life.
General insurers, however, suffered underwriting losses in their mainstay business of insurance.
Underwriting loss in the review period quadrupled to Sh2 billion from Sh510.2 million as claims from commercial vehicles and hospital bills rose sharply.
Underwriting losses—the difference between premiums collected and claims plus expenses paid— were highest in the motor commercial business, with the loss increasing more than four times to Sh2.08 billion.
This was followed by the medical insurance, which saw its underwriting losses widen from Sh629.9 million to Sh1.15 billion, overtaking the Sh726.9 million loss that had been made in the whole of last year.
Medical, motor private and motor commercial had the highest amounts of paid claims at Sh8.24 billion, Sh5.02 billion and Sh4.64 billion.
The three classes jointly constituted 88.9 percent of all claims paid by general insurers.
The worse underwriting loss came in the period claims paid increased by 19.6 percent to Sh20.15 billion compared with Sh16.85 billion paid earlier.
