Insurance companies paid Shs.564.8 billion in claims in 2021 – InsuranceNewsNet

The Insurance Regulatory Authority(IRA) revealed that insurance companies paid out Shs.564.8 billion in claims in the year ending 2021.

The Insurance Regulatory Authority(IRA) revealed that insurance companies paid out Shs.564.8 billion in claims in the year ending 2021.

A claim is a formal request to your insurer for reimbursement of losses covered by your insurance policy.

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In releasing the performance report for the year 2021, IRA Chief Executive Ibrahim Kaddunabbi Lubega said there was a significant increase in claims paid out by insurance companies; a move he says is good for the sector.

“Claims payment is essential to the insurance value chain because it makes insurance tangible. As a regulator, we have instituted zero tolerance measures for non-payment of legitimate claims. In this regard, it is impressive to note that the gross claims paid on account of both life and non-life, including Health Member Organizations increased by 27.01% from Shs 44.7 billion in 2020 to Shs 564.79 billion in 2021,” Kaddunabbi said.

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He noted that the claims growth figure has consistently exceeded the growth in gross written premiums, showing an increased commitment from players to meet their obligations.

“It’s a very good gesture that shows that when you take out insurance and you suffer a legitimate loss, you are compensated,” said the Insurance Regulatory Authority CEO noted.

In terms of insurance penetration, the latest annual performance report indicates that insurance penetration in the country improved slightly from 0.026% to 0.796% in 2021.

According to the CEO of the IRA, the figure should not be interpreted to mean that insurance growth was insignificant, but rather as the continued spread effect of rebased GDP.

Insurance penetration is a ratio of insurance premium to gross domestic product measured at current prices.

In terms of underwriting performance, the latest report from the insurance industry indicates that non-life underwriting performance increased from Shs 23.77 billion in 2020 to Shs 22.28 billion in 2021.

“The decline in underwriting performance is due to the increase in claims over the reporting period,” Kaddunabbi said.

In terms of asset base, the sector’s net assets stood at 832.6 billion shillings, an increase of 30% from 640.6 billion shillings in 2020.

Net assets are a measure of financial strength and the industry’s ability to absorb risk.

Kristan F. Talley