Kenya has 44 insurance companies – two are under receivership. The industry is regulated by the Insurance Regulatory Authority (IRA), a semi-autonomous regulator, set up in 2008. IRA is expected to improve regulation and stability of the industry.
In 2011, IRA placed another underwriter, Blue Shield Insurance, under administration. The Authority, in partnership with the Commissioner of Police, created the Insurance Investigation Unit to investigate insurance fraud. It also registered the first Islamic insurance firm, First Takafu.
Previously, IRA was a department of the Ministry of Finance, which administered the insurance industry, and it was headed by the Commissioner of Insurance, who is today at par with other regulatory authority heads. The Finance Act 2011 boosted the power of the Authority through amendments to the Insurance Act that substituted the word “minister” with “Authority’
The industry operates under an umbrella body, the Association of Kenya Insurers (AKI), which was established in 1987. Before then, it was called the Insurance Association of Eastern Africa. Membership is open to any registered insurance company. Its main objective is to promote prudent business practices, create awareness among the public and accelerate the growth of insurance business in Kenya.
At the apex of the insurance sector are two reinsurance companies, the quasi-public Kenya Reinsurance Corporation (Kenya Re) and East African Reinsurance Company. By 2010, short and long-term underwriters were 44, of which 21 provide medical insurance. Others are 3,788 insurance agents and 158 insurance brokers.
The industry’s assets grew by 2.1 per cent to Kshs181.2 billion ($2.132 billion). Net premiums rose by 33.1 per cent to Kshs85.4 billion ($1.005 billion) and general insurance claims by 30 per cent to Kshs28.l billion ($330.6 million).
Under the 2011 amendments to the Insurance Act, an insurer wishing to open a branch or a new place of business in Kenya, or to change the location of a branch, or an existing place of business, applies to the Authority for approval.
IRA now holds directors of the insurer to be jointly and severally liable for the recovery of the assets in case of mismanagement. The Authority was also given powers to manage assets of an insurance company in the public interest and take any other action in this regard.
