The insurance industry recorded a 16.5% increase in premiums underwritten in 2014 to Ksh157 billion from Ksh135 billion recorded over the same period in 2013.
Insurance Regulatory Authority Chief Executive Officer Sammy Makove says the insurance industry is experiencing a lot of changes. “We are witnessing mergers, acquisitions and new entrants into the local market. No doubt these actions are indicative of the industry’s worth and potential and we hope that with all these new developments, we will be able to realise our penetration projections and make insurance services not only affordable but also accessible to Kenyans,” he added.
Speaking at the official opening of a two-day 2015 Actuarial Convention at Intercontinental hotel in Nairobi, Mr Makove expressed his optimism about the ability of financial professionals to support the international standards in regulation of risk-based supervision in Kenya and East Africa, adding that this would be an important step towards having strong financial institutions especially in insurance.
Currently, insurance penetration stands at 3.4% of the GDP. This puts Kenya 4th in Africa behind South Africa, Namibia and Mauritius. In terms of market growth, it is ranked first in Africa followed by South Africa and Morocco. According to the World Economic Forum’s Global Competitiveness Index (GCI), Kenya was ranked 34th in the world (2nd in Africa) for companies’ innovative capacity.
He said the supervision of insurance companies has shifted from compliance to risk based. Actuaries are very important in the implementation on risk-based supervision, which requires full disclosure and publication of assets that in turn provide for evaluation of companies based on capital and risk analysis.
Risk-based supervision is expected to become effective on 30th June 2018 and companies will be expected to undertake quantitative impact studies (QIS’s) in the interim. Mr Makove said that the Authority launched a five-year scholarship programme in 2011 to build actuarial capacity for the industry.
The President of The Actuarial Society of Kenya (‘TASK’), Mr James Olubayi, said the actuarial profession plays an important role in the prudential management of insurance companies, commercial & investment banks, employee benefit schemes and other financial institutions. He said actuarial skills, however, are also more important in many other wider fields to resolve the challenges of the increasingly complex financial risks that the modern society faces.
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