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Insurers now weigh premium raises amid rising flood risks
A woman walks past the wreckages of private vehicles destroyed following heavy rainfall in the Grogan area, popular for automotive workshops and secondhand spare parts in downtown Nairobi, Kenya on March 7, 2026.
Insurers are considering raising premiums on flood risks following a fresh wave of floods sweeping across parts of Kenya, barely two years after they paid out more than Sh5 billion in claims linked to the same weather event.
Properties, including cars and houses as well as businesses, were destroyed following a recent downpour that also caused death, injuries and displacements, leaving underwriters bracing for another surge in claims across various insurance classes.
Now insurers, including APA Apollo Group and Sanlam Allianz General Insurance Kenya, are considering higher premiums for properties in high-exposure areas and coverage limits for properties that have experienced repeated flood losses without any mitigation measures in place.
Insurers around the world usually raise their premiums if they suffer higher-than-usual losses from a particular line of business.
The fresh wave of floods and the accompanying claims follow a similar occurrence in 2024, which left insurers with more than Sh5 billion in claims to settle, raising fresh questions about whether current insurance premiums adequately reflect the growing cost of climate-driven disasters.
The weatherman is still forecasting high-intensity rainfalls, even as insurers warn that the increasing frequency and severity of floods are testing their risk models and could eventually force a reassessment of pricing, coverage terms and flood-risk exposure, particularly in high-risk urban areas.
Ashok Shah, group CEO at APA Apollo Group, said the insurer is actively reviewing flood risks in Kenya following recent heavy rains to ensure the pricing model is “fair and sustainable” while ensuring full protection.
“We are updating our models and policy terms to ensure customers remain fully protected. Stricter ratings, loadings, and excesses may apply, and the full benefit of coverage relies on implementing recommended risk mitigation measures,” said Mr Shah in a response to our queries.
“While adjustments such as higher deductibles, exclusions, or revised risk zoning may be necessary in certain cases, our approach prioritises the customer, keeping them informed and supported while maintaining meaningful flood protection.”
The latest wave of floods follows that of March to June 2024, pointing to the increasing frequency and intensity of weather-related events. Kenya’s experience mirrors the global trend where frequent and intense weather events like floods, drought and fires have led to higher claims for insurers.
CIC General Insurance Managing Director Fred Ruoro said in an emailed response that the insurer has already started receiving claims related to the recent floods that hit several parts of the country. The insurer covers losses arising from floods under its motor vehicle and property insurance policies.
“Several customers have already reported their claims, and we have begun processing them for prompt settlement. If you are a CIC General Insurance customer and have not yet reported your loss, we encourage you to do so as soon as possible. Early reporting enables us to prioritise your claim and support you in getting back to business quickly,” said Mr Ruoro.
Mr Ruoro said insurers would have to maintain strong capital reserves and financially stable reinsurance partners to weather climate-related risks such as floods. The insurers settled claims worth Sh700 million from the 2024 floods that left a trail of injuries, death and destruction of homes, vehicles and crops.
Michael Ndegwa, Head of Corporate and Commercial Lines at Sanlam Allianz General Insurance Kenya, said in an emailed response, insurers are placing increased emphasis on understanding and managing flood exposure as flood-related losses rise.
He explained the insurer has been reviewing historical loss data, analysing geographical risk patterns, and strengthening underwriting controls in areas that are more vulnerable to flooding.
“Policyholders should not necessarily expect blanket restrictions. However, there will likely be a greater shift toward risk-based underwriting, particularly in locations with a history of repeated flood events. This may involve adjusted pricing to reflect flood risk, tailored deductibles in certain cases, and stronger risk-mitigation requirements for properties located in high-risk areas,” said Mr Ndegwa.
He added that insurers are concerned that while flood risks in Kenya were historically associated with low-lying areas and river basins, recent events have highlighted the growing impact of urban flooding driven by rapid urbanisation, inadequate drainage infrastructure, and encroachment on riparian reserves.
“Our approach is therefore to ensure that pricing reflects both historical experience and emerging risk patterns, enabling us to provide solutions that remain sustainable while continuing to protect our customers against weather-related risks,” said Mr Ndegwa.
