The uptake of insurance in Kenya slowed down in 2018 with the level of insurance penetration having dipped to 2.43 percent, according to the latest annual report by the Association of Kenya Insurers (AKI)
The report indicates that the growth of the insurance industry decelerated to 3.06 percent in 2018 from 6.45 percent in 2017.
During the period, the insurance industry’s gross written premium grew by 3 percent in 2018 to Ksh.11 billion from Ksh209.7 billion in 2017.
The industry’s net claims dropped marginally to Ksh110.34 billion in 2018 compared to Ksh110.70 billion in 2017. Its overall profit before taxation however decreased by 58.34 percent to Ksh5.02 billion in 2018. Return on capital employed decreased by 57.68% from 10.42% in 2017 to 4.41% in 2018.
According to AKI Executive Director Tom Gichuhi the sector over the years, grew by 4.6 percent but the sloppiness in 2018 was blamed for the slow growth of the non-life business that accounts for 59.62 percent of total premium income, included non-compliance with a declaration of policies, offshore placement of business and over-ceding of premiums.
“Growth is a factor of insurable risks increasing in number and size then pricing those risks properly if the pricing is not proper you cannot talk about growth,” said Gichuhi.