Africa Business Communities

Kenya’s insurance industry showing positive signs of growth

Having witnessed a significant growth across all the sectors in the past few years, the Kenyan insurance industry will continue to grow at a double-digit CAGR, finds a new report by Timetric’s Insurance Intelligence Center.

 Overall, the sector more than doubled in size from KES77.9 billion (US$983.3 million) to KES157.7billion (US$1.8bn) during the review period (2010-2014). Furthermore, it is expected to continue showing a strong growth over the next five years, with Timetric’s analysts forecasting the industry to reach KES324.2 billion (US$3.1 billion) by 2019, at a CAGR of 15.5%.

 Motor insurance is expected to be a key growth area

 Timetric expects the non-life insurance sector to grow by 16.5% per year during the forecast period (2015-2019), with motor insurance being at the top. This owns in part to the increasing disposable income of Kenyans. As a result, higher disposable income will likely support car sales and consequently, with third-party liability insurance being compulsory, insurers should witness an increase in premiums. Car sales in Kenya increased by approximately 10% over in the last five years from 196,456 to 218,057 - a trend which is expected to continue over the forecast period, supporting demand for motor insurance.

 New construction projects promise premiums for property insurers

 According to Timetric, a number of construction projects that are planned across Kenya in the coming years will provide opportunities for property insurers. Construction output in Kenya rose from KES289.0 billion (US$3.6 billion) in 2010 to 687.5 billion (US$7.8 billion) in 2014, supporting the growth of property insurance. The category is expected to value KES48.0 billion (US$464.8 million) in 2019, mainly driven by government investments to develop the Lamu Port and South Sudan-Ethiopia transport corridor, the Mombasa–Nairobi standard gauge rail network and the construction of a 2,000km road

 

About Timetric

Timetric is a leading provider of online data, analysis and advisory services on key financial and industry sectors. It provides integrated information services covering risk assessments, forecasts, industry analysis, market intelligence, news and commentary.

www.timetric.com

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