Liberty Kenya Holdings expects its profit for the year ended December 2025 to fall by at least 25 percent, hit by increased claims payout, the sale of operations in Tanzania and a reduction in investment returns.
The projected decline in earnings has seen the Nairobi Securities Exchange-listed insurer issue a profit warning. This means that the earnings will fall by at least a quarter from the Sh1.37 billion posted in the year ended 2024, which was 2.2 times higher than the Sh631 million realised in 2023.
“Based on preliminary unaudited consolidated financial results, the board of the company wishes to announce that the consolidated earnings after tax for the year ended December 31, 2025 are likely to be at least 25 percent lower than the audited earnings after tax for the year ended December 31, 2024,” said the company in a statement.
Liberty said in a notice that it is going to book an accounting loss following disposal of its entire 60 percent stake in Heritage Insurance Company Tanzania Limited, booking Sh492 million net proceeds. The sale saw the insurer end its 25-year operation in neighbouring country.
The exit from Tanzania came on the back of the unit having reported a large mining-related claim estimated at Sh4 billion in the financial year ended December 2023, even though the insurer did not link its exit to this payout.
Liberty booked Sh217 million accounting loss in the half-year ended June 2025 when net earnings fell by 29.8 percent to Sh428 million from Sh610 million. The insurer cited an increase in volume of motor and medical claims and the accounting loss.
The insurer said the Tanzania transaction will impact its earnings as well as the “adverse claims experience” experienced in 2025. Insurers usually post underwriting losses or reduced underwriting profit when claims rise faster than the pace of growth in premiums received.
In addition, Liberty says it experienced a reduction in overall investment yields compared to 2024—a trend that was generally witnessed in the market last year.
Liberty’s investment income rose 3.3 times to Sh4.74 billion in 2024 from Sh1.4 billion in the previous year, contributing to the rise in net earnings and the rise in dividend per share distribution to Sh0.50 from Sh0.37.
However, the insurer had cautioned that the “exceptional” investment performance experienced during 2024 was unlikely to be replicated in 2025.
The sale of the Tanzanian unit left Liberty Kenya with Liberty Life Assurance Kenya Limited, Heritage Insurance Company Kenya Limited, and CFC Investment Limited, all of which it owns 100 percent.
Insurance Regulatory Authority data up to June 2025 showed the insurance industry had witnessed a surge in claims and a reduction in investment income, putting their earnings under pressure.
