Kenya’s insurance industry posted solid performance in 2024

• Kenya’s Insurance Sector Records steady growth in second year of IFRS-17 adoption;

Kenya’s insurance industry posted solid performance in 2024 as players navigated the second year of reporting under the IFRS-17 standard.

With initial compliance largely achieved, insurers shifted their focus to optimizing operations, strengthening systems, and enhancing cross-functional collaboration.

Core insurance activities delivered improved results, with insurance service revenue rising by 8% to KES 275.18 billion, up from KES 255.11 billion in 2023.

The insurance services result surged 45% to KES 16.35 billion from KES 11.28 billion indicating stronger operational efficiency and profitability.

Net investment income increased by 93% to KES 112.74 billion compared to KES 58.17 billion the previous year.

Insurance penetration saw a marginal growth to 2.44% from 2.41% in 2023, calculated using the global benchmark of Gross Written Premium (KES 395.3 billion) against GDP (KES 16.2 trillion).

The non-life segment maintained its dominance in the overall insurance space, generating KES 204.25 billion in insurance revenue an 8.52% rise from KES 188.53 billion in 2023.

Medical insurance remained the largest contributor at KES 73.47 billion (35.97%), followed by motor insurance (commercial and private combined) at KES 59.15 billion (28.96%).

Life insurance recorded steady growth of 7%, with revenue increasing to KES 70.9 billion from KES 66.4 billion. The Group Life segment led the category with KES 37.2 billion in revenue and a 52.47% market share, driven by increased demand for employee benefit solutions.

Ordinary Life followed with 25.03% (KES 17.8 billion).Annuities/Income Drawdown ranked third at KES 7.8 billion (10.94%), while Pensions/Deposit Administration generated KES 6.6 billion (9.28%). Investment/Unit Linked products contributed KES 1.6 billion (2.28%).

Industry-wide trends mirrored global developments.The integration of Artificial Intelligence is expected to transform operations by improving customer engagement, streamlining claims management, and enhancing fraud detection.

However, rising digitization also heightens cyber-risk exposure, underscoring the need for stronger cybersecurity frameworks and positioning cyber insurance as a growing opportunity.

On ESG, insurers continued implementation efforts but are reassessing strategies to better align with stakeholder and employee expectations.

Talent management remained a concern, particularly the shortage of technology-skilled professionals and widening generational gaps that threaten knowledge transfer.

The legislative and regulatory environment remained dynamic, especially in taxation, with further changes anticipated in the year ahead.