After a strong close to 2024, Kenya’s insurers saw net earnings fall by 42% in the first quarter of 2025 to KSh4.9 billion ($38 million), from KSh8.5 billion ($66 million) a year earlier, according to the Insurance Regulatory Authority (IRA).
The decline was even sharper compared with the previous quarter, when post-tax profit stood at KSh52.1 billion ($402 million), representing a 90% drop.
The earnings slump was largely driven by weaker investment returns. Gross investment income fell 22% to KSh43.7 billion ($388 million), even as insurers increased their allocation to government securities — the largest component of their portfolios.
Long-term insurers recorded the sharpest gains, with KSh 36.98 billion ($286 million), representing 89% of total returns in that segment.
On the other hand, “general reinsurance business had the highest investment income of KSh1.51 billion ($11.7 million),” the IRA noted in its latest insurance industry report.
Premium growth supports balance sheets
Despite weaker investment income, premiums and assets continued to expand. Long-term insurers reported gross premiums of KSh54.4 billion ($421 million), up 6.8% year-on-year.
Their asset base grew 22.7% to KSh937.5 billion ($7.3 billion), of which KSh892.1 billion ($6.9 billion), or 95.2%, was invested in income-generating assets. Shareholders’ equity stood at KSh88.7 billion ($686 million), or 9.4% of the total.
General insurers collected KSh75.6 billion ($585 million) in gross premiums, up from KSh69.8 billion ($538 million) a year earlier. Claims rose to KSh25.8 billion $199.5 million, leaving the claims incurred loss ratio at 72%, compared with 72.3% in the previous year.
Reinsurers also posted gains. Long-term reinsurers grew net premium income by 9.1% to KSh1.12 billion ($8.6 million) from KSh1.01 billion ($7.8 million) in Q1 2024.
General reinsurers reported an 11.8% rise in net premium income to KSh7.9 billion ($61.1 million), while paying out KSh4.3 billion ($32.2 million) in claims and incurring KSh2.8 billion ($21.7 million) in direct expenses, including commissions and management costs.
“The result was an underwriting loss of KSh120.68 million ($930,000) and operating profit of KSh1.37 billion ($10.6 million) as at the end of Q1 2025,” the IRA said.
Fraud cases rise quarter-on-quarter
The softer financial showing coincided with an increase in reported fraud. Cases rose to 35 in the first quarter, up from 29 in Q4 2024, though down from 55 in the same period last year.
Most involved false motor accident claims, forged certificates and theft by agents, while other cases included attempts to secure payouts under false pretences and theft by an advocate.
The IRA said several suspects had been arrested and charged following investigations with the Insurance Fraud Investigation Unit (IFIU).
Fraudulent claims remain a key driver of higher premiums for policyholders, though the regulator has moved to tackle the problem through closer scrutiny of agents, digital verification of certificates and consumer education.
Note: Local currency figures were converted to their estimated value in US dollars using the 2025 average exchange rate of KSh129.3/$1.
