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Insurers’ gross premiums from motor business rose by 14.1% to KES53.9bn ($398m) in 2022 compared to 2021 as insurers increased premium rates by as much as 50%, according to data from the Insurance Regulatory Authority (IRA).
The higher annual premiums served to partially trim losses from the motor class of insurance, which saw an underwriting loss of KES7.6bn in 2022 compared to KES9.5bn in 2021, reported Business Daily.
In addition to the premium rate hikes, some underwriters announced they would no longer cover vehicles older than 12 years or with a value less than KES600,000.
“We have seen an improvement in the motor loss ratios due to the increase in premiums which will bring stability in this line of business and also ensure the availability of funds to pay claims,” Jubilee Allianz General Insurance CEO Adja Samb told Business Daily. “This is despite the cost of claims going up due to the rise in inflation.”
Claims nevertheless remained an Achilles heel for motor insurers with total claims incurred rising by 5.8% to KES37.4bn in 2022. The increased cost of spare parts has, for instance, raised the cost of repairs requiring the motor underwriters to make higher payments for claims.
Source: Middle East Insurance Review
