Flood-related claims cost Old Mutual General Insurance about Sh200 million last year, with the insurer now assessing fresh losses from recent rains in a sign of escalating climate risks in the market.
Japheth Ogalloh, the managing director of Old Mutual General Insurance, said floods were one of the main drivers of claims settled in the year ended December 2025, alongside a rise in the price of spare parts, with effects felt across medical and motor covers.
“We had floods last year and into this year in the first quarter. Last year, we paid over Sh200 million worth of flood-related claims. In general, risks related to climate change are becoming more frequent and severe,” said Mr Ogalloh.
The insurer joins a growing list of firms disclosing payouts worth millions of shillings as the frequency and intensity of floods rise in Kenya.
The floods have left a trail of death, injuries and destruction of property such as vehicles, houses, crops and livestock.
Floods are increasingly weighing on insurers’ balance sheets, with the worst in recent years seen in 2024 when claims topped Sh5 billion.
The 2024 floods left CIC General and Britam General with about Sh700 million and Sh400 million in claims to settle.
Industry pressure
The pattern persisted last year and has resurfaced this year, forcing underwriters to consider reviewing premium rates even as more customers inquire about flood cover.
Several other insurers, including CIC General, Britam General, Sanlam Allianz General and APA, said recently that climate-related risks are testing their models and could eventually force a reassessment of pricing, coverage terms and flood-risk exposure, particularly in high-risk urban areas.
“We have assessed how we can approach climate-related risks. We are now using models that identify risk areas and strengthen our underwriting terms. We want to ensure risk mitigation is done on time and the pricing is right,” said Mr Ogalloh.
Kenyans have been increasing their appetite for climate-related covers, with industry data showing that premiums for crop and livestock covers hit Sh1.2 billion at the end of 2024, qualifying customers for payouts of about Sh36.73 billion if the covered losses occur.
The Kenyan economy is highly exposed to climate-related hazards and the implications of climate change, according to the International Monetary Fund (IMF).
This is largely due to the climate-sensitive nature of its economy, with agriculture, water, energy, tourism and wildlife sectors playing an important role.
The agriculture and tourism sectors – the two key climate-sensitive sectors – comprise over half of Kenya’s GDP, with agriculture providing employment to about 80 percent of the rural workforce.
