Kenya’s long-term insurance sector growth slowed down in 2018, the country’s industry regulator has revealed.
According to Kenya’s Insurance Regulatory Authority (IRA) Industry Report for Quarter Three (Q3) of 2018, long term insurance business in Q3 2018 experienced a growth of 3.9% compared to a growth of 16.9% recorded in the previous year during the same period.
Since 2016, when profits dropped to $118.2 million from $144.8 million, the country’s insurance industry has taken a few hits. In September of 2018, it emerged that Kenyan insurers were hoping for a rebound after posting a cumulative 18% decline in profitability in 2017, which marked a difficult year for the industry.
The decline is attributed to a government-backed cap on banks’ interest rates, which continues to have a spiral effect leading to a slowdown in lending. The slowdown has affected investments in a number of projects.
The IRA’s Q3 report now shows that within the same period, general insurance premiums recorded a marginal growth of 1.7% compared to a growth of 7.2% recorded in the previous year. The general insurance business underwriters incurred Ksh43.88 billion ($440 million) in claims as at end of Q3 2018.
In 2019, insurers plan to intensify market sensitization on their products. They are encouraging Kenyans to embrace insurance, especially for life and household goods. The industry is also engaging electronic manufacturers to develop ideal insurance products.
The insurers hope that more in depth knowledge of the industry will encourage Kenyan consumers to take up insurance covers.