Insurers have recorded a Kshs. 3.9 billion underwriting loss for motor class during the first six months of 2021 on account of increased claims.
According to the Insurance Regulatory Authority’s latest industry report, motor private and motor commercial classes of general insurance business saw underwriting loses increase to Kshs. 2.89 billion and Kshs. 1.03 billion respectively.
During the period, claims arising from motor private rose 29.8% to Kshs. 9.7 billion from Kshs. 7.2 billion recorded over the same period last year, while motor commercial claims surged to Kshs. 7.4 billion from Kshs. 6.8 billion, a 22.8% increase.
“Motor classes of insurance business comprised of 52.7% of total claims incurred compared to their contribution of 27.8% of the total premium under general insurance business,” said IRA in the report.
Industry claims incurred increased 15.3% to Kshs. 32.4 billion during the period under review compared to Kshs 28.1 billion reported in first half of the previous year
On the other hand, insurers paid out claims rose 16.9% to Kshs. 30.6 billion compared to Kshs. 26.2 billion paid in second quarter of 2020.
Medical class of business also sunk into losses in the second quarter of 2020, declining 151.7%, from a profit of Kshs. 891 million to a loss of Kshs. 460.4 million.
Similarly, aviation underwriting losses widened to Kshs. 101.3 million from Kshs. 93.3 million recorded last year.
“The underwriting performance of general insurance business was a loss of Kshs. 1.46 billion compared to a profit of 62.45 million reported in Q2 2020. Workmen’s compensation class made the highest underwriting profit of Kshs. 2 billion.”
General insurance premiums increased 16.6% during the period to stand at Kshs. 85.4 billion from Kshs. 73.2 billion.
Medical and motor insurance classes maintained a leading position in terms of contribution in general insurance business premium at 34.5% and 27.8% respectively, IRA stated.