Medical underwriter, AAR Insurance has posted a 58.1 percent dip in its pre-tax profit for the year ended December 2020.
The drop in profitability has been attributed to a surge in claims due to the COVID-19 pandemic coupled with a tough operating environment during the period under review.
The health insurance company’s overall performance equally declined by 55 percent to Ksh.234 million in 2020 compared to Ksh.517 million posted during a similar period the previous year.
Total assets grew by 4percent to stand at Ksh.5 billion.
Despite an increase in operating expenses by 3 percent on account of costs incurred in cushioning staff and customers against the pandemic, the management expenses ratio improved from 35 percent in 2019 to 30 percent in 2020.
During the period under review, gross written premiums, declined marginally by 3 percent from Ksh.5.86 billion to Ksh.5.68 billion.
This even as net earned premiums grew 19.7 percent to Ksh.3.74 billion shillings.
In 2020, AAR payed out about Ksh.200 million in COVID-19 claims a surge in claims AAR Insurance Kenya Managing Director, Nixon Shigoli, attributes to COVID-19 impact on business and families.
The underwriter plans on capitalizing on it’s the digitization of its operations to improve efficiency and drive growth of its business.
The medical insurer has set eyes on the Small and Medium Enterprises (SME) and Micro-insurance through innovation.
