The insurance sector in Kenya is optimistic that there would be a rebound this year after some insurance companies posted impressive results for the 2019 half-year.
Regional insurer Britam’s half-year profit before tax rose by 78% to $22.8m, from $13.3m over the same period last year, while Sanlam returned to profitability with net earnings of $6m compared with a $14.2m loss in 2017, reported The East African.
Net profits in the insurance sector surged by 138% to KES5.7bn ($55m) in the second quarter of 2019 from KES2.3bn for the corresponding period last year.
Insurance Regulatory Authority data shows that the sector was able to narrow its underwriting losses to KES1.2bn in 2Q2019 from KES2.6bn for the same quarter in 2018.
The improved profitability was helped by a fall in claims from KES27.7bn to KES27.2bn, while premiums rose by 4% or KES5bn to KES117bn in 2Q2019.
The amendment to the Insurance Act this year directing customers to pay premiums directly to insurance companies, in a move aimed at curbing rogue brokers, is particularly expected to have positive impacts on the industry.
In addition, the industry showed net profits of KES3.1bn in 1Q2019, 88% higher than in the corresponding quarter last year.
Last year, for the full year, insurance companies in Kenya saw net profits dive by a staggering 61.5% to $33.7m from $87.7m in 2017. Industry insiders attributed the plunge in profits to the capping of interest rates introduced in 2016 which continues to have a ripple effect on business because lending to insurable investment projects and assets remains constrained.