Quick Take: Kenyan Health Insurers Cashed out in 2020 due to COVID-19

In a surprising development, health insurers in Kenya cashed out big time amid the COVID-19 pandemic. Data obtained from the Insurance Regulatory Authority (IRA) showed that the insurers reported a collective underwriting profit of $8.9 million (Sh891 million) within the first two quarters of 2020.

According to Tom Gichuhi, the Chief Executive of the Association of Kenya Insurers, Tom Gichuhi, the impressive performance can be attributed to the fact that insurance holders generally avoided the hospitals out of fear of contracting the deadly virus. As such, health insurers paid out little to no claims, a situation that ultimately reversed the 6-year losing trend recorded by the firms.

“Many people avoided going to hospitals for fear of contracting Covid-19. There was highly reduced traffic to hospitals and even those seeking elective surgeries were also postponing. People were also working from home and therefore for simple ailments which could otherwise drive heavy traffic to hospitals, people avoided,” Gichuhi told Business Daily Africa.

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Note, however, that not all of Kenya’s 24 health insurers reported profits during the half-year period. At least, six of them (including Kenya Alliance, Madison, Takaful, Pacis. ICEA Lion, and Tausi) all reported losses. But this number is less when compared to the 16 health insurers that ran at a loss in half-year 2019.