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Kenya: Insurance Industry Profit Records Dip
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The Nation (Nairobi)
23 July 2008
Posted to the web 23 July 2008
Mwaniki Wahome
Nairobi
The insurance industry's profit before taxation declined by 31.5 per cent for the year 2007 compared to 2006. The combined profit before taxation was Sh4.1 billion compared to Sh5.85 billion in 2006.
Briefing the media on the industry's performance Tueday at Stanley hotel, Association of Kenya Insurers chief executive officer, Tom Gichuhi however said the changes that are being effected in the industry will spur growth.
The over-all underwriting loss for the industry was Sh1.2 billion, with life insurance recording an underwriting loss of Sh 1.58 billion. General insurance, however, recorded underwriting profit of Sh 365 million. Mr Gichuhi said the new workman's injury Act, that took effect on June 2nd, would increase the volumes of premiums.
More business
"It is now compulsory for the employers to insure their workers, this means more business for us." he said. He said this category had over the years recorded poor performance.
However, he said they were discussing with the government on the maximum and minimum premiums to be prescribed.
The gross written premium increased to Sh 47.39 billion in 2007 compared to Sh 41.68 billion in 2006, representing 13.7 per cent growth. The net claims for the year totalled Sh 24.7 billion compared to Sh 21.2 billion in 2006, representing 16.5 per cent increase.
Of the 43 insurance companies, 20 were in general insurance only, seven in long-term business and the other 15 in composite (life and general).
Twenty-three general insurance companies made an underwriting profit while nine life insurance companies recorded an underwriting profit.
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However, the total assets held by the industry increased by 16.25 per cent to Sh127.96 billion in 2007 compared to Sh 110 billion in 2006.
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