Insurance sector records growth
13 September 2013, 13:32
Nairobi - Kenya insurance industry recorded 15 percent growth in the first half of this year, with premiums growing to 744.7 million U.S. dollars from 647 million dollars recorded in the similar period last year, according to results released on Thursday in Nairobi.
Growth was attributed to increase in the number of people buying insurance and introduction of new innovative products that address the insurance need of Kenyans directly.
"Industry recorded growth across all business categories," said Sammy Makove, the Chief Executive of Insurance Regulatory Authority (IRA).
"The forecast for the remaining part of the year paints a very positive picture as the industry's role in the development of the financial sector in the country continues to be appreciated," he added.
During the period in review, the premium income reported under life insurance business amounted to 242 million dollars while that of general business premiums stood at 486 million dollars.
"The portfolio mix of the insurance business in the country is still skewed towards general business and the Authority, through its consumer outreach activities is raising awareness about the importance of life insurance and encouraging consumers to purchase life policies," said Makove.
Income from life insurance accounted for 33 percent of all premiums the rest being genera insurance
During the same period, reinsurance companies reported 24.3 percent growth in their gross premium compared to the similar period last year.
The claims and policy holders' benefits incurred by insurance companies for the same period totalled 190 million dollars, an increase by 12.9 percent compared to the same period of the previous year.
The growth trend is good news for the IRA's planned increase of contribution of insurance to the economy from the current 3.1 percent to 5 percent in the next five years.
IRA is also seeking to make insurance one of the most vibrant financial sectors, just like the commercial banks and savings societies.
In past week, IRA signed a memorandum of understanding with the Capital Markets Authority (CMA), the Central Bank of Kenya (CBK), the Retirement Benefits Authority (RBA) and the Sacco Societies Regulatory Authority (SASRA), all being regulators in charge of supervising financial institutions in Kenya.
The MoU established collaborative arrangements to facilitate the effective performance of their respective duties and to promote safe and sound financial institutions for the stability of the financial system.
"The regulators recognize that the exchange of supervisory information is necessary to support effective consolidated supervision of financial institutions operating under their respective jurisdiction," the MoU reads.
"The Regulators therefore commit themselves to exchange information with respect to licensing, registration, supervision, handling of Financial Institutions and other matters of mutual interest."