Companies

Insurers’ losses up on more hospital visits

insurance

Insurance Regulatory Authority CEO Godfrey Kiptum. FILE PHOTO | NMG

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Summary

  • Two-thirds of medical insurance firms posted underwriting losses in the nine months to September when more people started going back to hospitals seeking treatment and consultations.
  • The performance marks a reversal of the boom seen in the same period a year earlier when 69 per cent of them made profits as their clients avoided going to hospitals amid the panic brought by the outbreak of the Covid-19 pandemic.

Two-thirds of medical insurance firms posted underwriting losses in the nine months to September when more people started going back to hospitals seeking treatment and consultations.

The performance marks a reversal of the boom seen in the same period a year earlier when 69 per cent of them made profits as their clients avoided going to hospitals amid the panic brought by the outbreak of the Covid-19 pandemic.

The hospital visits were also constrained by the government curbs on travel, a move that limited access to facilities in the capital Nairobi.

Insurance Regulatory Authority (IRA) data shows that only nine companies including Jubilee, UAP, Trident, Pacis, Alliance, Heritage, GA, First Assurance and CIC posted underwriting profits in the third quarter of last year.

Companies that managed to grow premiums strongly in 2021 were able to meet the sharp increase in claims as the travel curbs were lifted and more people trooped to hospitals.

Medical premiums rose to Sh40.8 billion in the nine months to September from Sh36.2 billion a year earlier while incurred claims increased from Sh14.7 billion to Sh15.1 billion.

Jubilee which grew gross premiums 14 per cent to Sh7.7 billion retained its position as the most profitable in the sector with an underwriting profit of Sh586 million.

CIC was the second most profitable insurer posting Sh315.5 million while First Assurance made Sh99 million.

“Our net claims rose by Sh1.5 billion from Sh2.9 billion to Sh4.4 billion while claim ratios rose to 71 percent compared to 67 per cent in 2020,” said Patrick Gatonga, a senior officer at Jubilee Health Insurance.

“This was partly attributed to the gradual opening of the economy and easing of travel restrictions countrywide which resulted in increased hospital visits by clients.”

At the height of the pandemic, the government imposed restrictions on movement including restrictions into Nairobi City which saw a decline in patient numbers.

Even as the windfall unwinds with higher medical claims, companies have also been able to grow health insurance premiums 12.7 per cent as more Kenyans sought medical cover given the health crisis.

The insurance regulator has compelled health insurance companies to cover the pandemic and include Covid-19 jabs in their policies.

Kenya has vaccinated 6.2 million people partially against Covid-19 with 4.7 million having received full doses.