Kenya Re paid out the highest fraction of premiums as claims in the general insurance business.
Kenya Re #ticker:KNRE paid out the highest fraction of premiums as claims in the general insurance business.
The Nairobi Securities Exchange-listed firm reported a claims ratio of 72.1 percent in the quarter ended June, according to data from the Insurance Regulatory Authority (IRA).
High claims mean an insurer is less likely to make a profit from the underwriting business after taking into account other operating expenses.
Insurers’ consolidated earnings are, however, also supplemented by investment income.
The worst business lines for Kenya Re include aviation, engineering and commercial motor vehicle where it is paying out more in claims than it receives in premiums.
This results in an underwriting loss that may be covered by investment income and other more profitable underwriting contracts. Kenya Re, in which the government owns a 60 percent stake, offers covers in more than 60 countries in Africa, Middle East and Asia. The IRA data shows that West African Insurance Companies Association (Waica Re) has the most profitable underwriting business in general insurance, paying out only 8.1 percent of the premiums it collects.
The multinational, which is based in Sierra Leone, opened a subsidiary in Kenya in March as it seeks to grow its market share in the local and East African region.
Ghana Re is the third most profitable with a claims ratio of 30 percent and is followed by Continental Re (47.2 percent) and East Africa Re (65.2 percent).