Samburu and Turkana counties posted the largest percentage growth in the uptake of insurance policies in 2017, an indication of a shift by pastoralists and farmers to tackle perennial challenges brought about by drought, disease and floods.
Total premiums in Samburu more than doubled, growing 168 per cent to Sh177.32 million, while Turkana registered an 86 per cent jump to Sh404.71 million, latest statistics by the Insurance Regulatory Authority (IRA), the industry regulator, show.
Thousands of pastoralists in the arid and semi-arid lands (ASALs) have moved to insure their animals against the ravages of disease and extreme weather conditions including drought and floods.
Bomet, Nyamira and Baringo, posted growth of 48, 47 and 37 per cent respectively, to Sh221.71 million, Sh174.59 million and Sh549.29 million; making up the top five counties with the largest growth in the uptake of insurance policies.
Garissa posted the steepest drop of 70 per cent to Sh100.52 million, followed by Makueni, Murang’a, Wajir and Lamu whose growth fell 43, 33, 30 and 26 per cent respectively to Sh374.57 million, Sh387.66 million, Sh49.92 million and Sh107.20 million.
Total premiums sold to institutions and individuals countrywide rose by 6.51 per cent to nearly Sh198.54 billion from Sh186.40 billion in 2016, IRA records show.
The data shows that only three out of 10 counties which controlled nearly 91 per cent market share in the industry registered growth in uptake in 2017 despite the increased risk for business, coinciding with a volatile general electioneering period last year.
Businesses adopted a wait-and-see attitude ahead of the historic presidential vote tallying which saw a repeat poll after the Supreme Court — in an unprecedented move in Africa — nullified President Uhuru Kenyatta’s win on irregularities.
Nairobi, which accounts for more than three quarters of the insurance business, Eldoret, and Meru were the only counties among the top 10 which posted growth in the uptake of covers against unforeseen risks.
Meru posted the highest growth at 22 per cent to Sh2.17 billion among the top 10 counties by market share.
It was followed by Nairobi, which also controls more than 60 per cent of Kenya’s national wealth, where total premiums rose 11 per cent to Sh151.08 billion; while Eldoret registered a seven per cent growth to nearly Sh2.72 billion.
The uptake of insurance cover among the top 10 counties by market share fell the most in Kisumu at 21 per cent to Sh2.61 billion, followed by Machakos (19 per cent), Kajiado (15 per cent), Nakuru (14 per cent) and Mombasa (12 per cent).
As a result, insurance penetration in 2017 fell to 2.71 per cent of Kenya’s gross domestic product (GDP) — a measure of national wealth — from 2.75 per cent, according to industry statistics.
Kenya trails South Africa, Namibia and Morocco where penetration levels stood at 13.76 per cent, 7.55 per cent and 3.49 per cent respectively.
Net earned premiums in non-life business, also known as general business, rose by a marginal 1.62 per cent to Sh119.4 billion, marking the slowest growth in nearly two decades.
“The performance which is probably one of the worst we have had, particularly so in general insurance, is a wake-up call for the underwriters,” AKI chief executive Tom Giuchuhi said in an interview on August 30.
“They need to react to those numbers because when you realise that your business is coming down, you have to think hard in terms of how you change your marketing strategies and product offering.” Medical covers continued to account for the largest share of net earnings by private insurers in general insurance despite a 0.71 per cent drop in gross premiums to Sh38.42 billion on the back of competition from enhanced benefits offered by State-run social medical scheme, the National Hospital Insurance Fund (NHIF).
Net premiums earned by private insurance firms from sale of medical covers increased 17.73 per cent to Sh28.40 billion, the IRA statistics indicate.
Net income from marine insurance posted the largest growth of 25.32 per cent to Sh1.89 billion boosted by enforcement of law requiring mandatory insurance of all marine cargo and coming from a low base.
Insurers earned Sh5.40 billion from the workmen’s compensation class, a 24.37 per cent rise year-on-year, while earnings from insured risks related to engineering and theft rose 7.49 per cent and 4.59 per cent to Sh934 million and Sh2.65 billion respectively.
Earnings from policies in the aviation business, on the other hand, posted the largest drop of 47.97 per cent to Sh23 million, followed by motor commercial and personal accidents where earnings dropped 23.920 per cent and 19.69 per cent respectively to Sh17.73 billion and 2.34 billion.