In the first half of 2021, local insurers have seen a surge in medical claims from customers visiting hospitals. At the same time, they’ve been hit by greater benefits from policyholders as these two factors combine to eat into their earnings pie during this period. An analysis of publicly listed insurance financials through June reveals that both claim size and benefit amounts are increasing at multiples of premiums earned.
Jubilee Holdings has seen net insurance claims and benefits rise by 41.9% to Ksh.12.2 billion, beating out their growth in premiums at 10%. Meanwhile Liberty Kenya saw a slower increase of 10%, bringing the total for claims to 4bn while UAP’s grew 46%.
Jubilee Holdings have net insurance benefits which rose due to an increased number of cases coming through resulting in higher payouts than premium income that only went up by 11%; meanwhile Liberty Insurance had low growth with just 1/5th that amount but still generated enough revenue from policy holders; finally there was UAP who also did very well compared against both rivals seeing almost double the benefit payout as they collected over 8 times more premium income (47%).
In the first half of 2016, Britam’s net insurance claims and policyholder benefits have risen by 16% to 9.4 billion Kenyan Shillings while its net earned premiums have only increased 2.6% to 12 billion Kenyan shilling – largely due to an increase in medical costs from hospital visits as well as a rise in withdrawn policies (Jubilee Holdings Regional Chief Executive Officer Julius Kipng’etich).
Sanlam has seen bigger rises with their 64% growth in 4.1billion kenyan shillings worth of claims but they too see 46.7 % growths at 4 .4bn Kenya Shilling In Net Earned Premiums(Julius Kipng’etich)
“People are now having confidence to go to hospital. Last year, there was a lot of postponed hospital visits as many stayed away in fear of contracting COVID-19. We have seen high withdrawals and surrenders as many individuals are in financial distress,” he said in an interview with Citizen Digital on August 27.
At the same time, Kipng’etich said the modification of policies in motor vehicle coverage has served to trim income booked by local insurers.
“About half of the general insurance business is motor. We have seen a number of clients shifting from comprehensive covers to third party insurance,” he noted.
On its part, UAP Holdings has flagged the tightening of reinsurance deals in the overall uptick of claims payable.
“Our net claims payable were up driven partly by increased medical claims related to COVID-19 cases and the hardening of reinsurance terms in 2021 that has led to reduced reinsurance recoveries,” the underwriter said in its half year trading statement on Tuesday.
The financial extracts on claims collaborate data from the Insurance Regulatory Authority (IRA) shows insurance firms incurred 3.8 million more claims in the opening half of 2021.
General non-liability claims represent the bulk of claims sought by clients at two million.
