Equity Group life insurance subsidiary's pre-tax profit for nine months ended September, rose 2.8 times to Sh1.07 billion on increased revenue, beating some of its banking operations.
At Sh1.07 billion, the pre-tax profit of Equity Life Assurance Kenya, which Equity Group owns fully, through Equity Group Insurance Holdings, has overtaken Equity Bank Tanzania (Sh0.9 billion) and Equity Bank South Sudan (Sh0.8 billion) on gross profits.
Equity launched the life insurance business in 2022 as the first underwriting insurance subsidiary, to offer life insurance and retirement solutions after clearance from the Insurance Regulatory Authority (IRA).
The review period saw insurance service revenue—which is made up of premiums received from customers—rise by 19 percent to Sh1.57 billion. Net investment income went up 3.8 times to Sh835 million from Sh218 million in September last year.
“The increase in insurance service revenue was driven by increased earnings from current business and previously unearned premium reserves,” says Equity.
Equity’s number of issued insurance policies have been rising, closing September this year at 13.3 million compared with 12.2 million at a similar time last year. This means that in nine months, the insurance subsidiary has attracted 3.3 million additional policies, when compared with 9.9 million at the close of last year.
Credit life cover— a type of life insurance that helps repay a loan if one dies before the loan is fully repaid— has been the low hanging fruit for the insurance subsidiary, riding on the Sh423 billion loan book in Equity Bank Kenya. Long term or life insurance also offers products such as life insurance, annuities and investments.
“We have won the trust of nearly 21 million customers by helping transform their lives completely. And so, it is easier when we start asking them to insure their life, health and wealth so that the quality of their life is not only when they have energy,” said James Mwangi, Chief Executive at Equity Group.
The increased premiums raises prospects of the subsidiary deepening its share in the long-term insurance business. IRA data showed Equity Life closed December last year with a market share of 8.7 percent to become the fourth largest life insurer in the country.
The 8.7 percent marked a tripling of its market share from 2.97 percent it had at the end of 2022, when it was ranked 11 out of the 24 long-term insurers in Kenya.
Equity Life relegated Kenindia Life to the fifth position even as the top three positions remained unchanged. Britam Life Assurance remained the leader with a market share of 21.5 percent followed by ICEA Lion Life Assurance (16.2 percent), Jubilee Insurance Company (10.2 percent). Kenindia closed at 6.6 percent.
The top five life insurers commanded a market share of 63.2 percent, leaving the rest of the 19 insurers with a combined market share of 36.8 percent.
