Insurance in Kenya is known to have been in existence for over sixty years now with the first insurance companies believed to have been owned by British insurers during the colonial times. The industry is governed by the Insurance Act and regulated by the Insurance Regulatory Authority. The Insurance Regulatory Authority (IRA) was created by the Insurance (Amendment) Act of 2006 and came into operation on 1st May 2007.
The Authority was established with the mandate of regulating, supervising and developing the insurance industry. Before the establishment of IRA, these functions were performed by the Department of Insurance in the Ministry of Finance. (IRA 2010) As per AKI Insurance Industry Report for the year 2009, there were 44 licensed insurance companies, majority offering non-life insurance business only, nine of them life insurance business while fifteen were composite (both life and non life). There were 137 licensed insurance brokers, 21 medical insurance providers (MIP’s) and 3,076 insurance agents. Other licensed players included 106 investigators, 57 motor assessors, 18 loss adjusters, 2 claims settling agents, 5 risk managers and 26 insurance surveyors.
The industry’s contribution to the country’s GDP is still low although there has been notable growth for the last seven years. The gross written premium by the industry was Kshs 64.47 billion compared to Kshs 55.19 billion in 2008, representing a growth of 16.8 %. The gross written premium in non-life insurance was Kshs 43.11 billion (2008: Kshs 36.89 billion) while that from life insurance business was Kshs 21.36 billion (2008: Kshs 18.30). Non-life insurance premium grew by 16.8 % while life insurance premium and contributions from deposit administration business grew by 16.7 %.
The combined industry profit after taxation increased by 14.4% to Kshs.4.29 billion compared to Kshs 3.85 billion in 2008. In 2009 the industry paid Kshs. 20 billion for claims for general insurance...