Medical insurance claims have nearly doubled over the past five years to Sh52.61 billion, driven by rising healthcare costs and increased utilisation, forcing insurers to raise premiums to remain viable.
Latest industry data shows claims rose by 97.7 percent from Sh26.69 billion in 2021 to Sh52.61 billion last year, underlining mounting pressure on underwriters as more Kenyans seek treatment and the cost of care escalates.
The surge in claims has been accompanied by a steady increase in premiums, which grew by 81.1 percent from Sh51.42 billion in 2021 to Sh93.28 billion last year. This reflects insurers’ efforts to price in higher risks and sustain their medical books amid shrinking margins.
Medical insurance remains the largest segment in the general insurance business, accounting for 41 percent of Sh227.16 billion total premiums last year. The outsized share of medical insurance highlights its central role in the sector’s growth as well as its vulnerability to cost pressures.
Rising medical inflation has compounded the challenge. Kenya’s healthcare costs are projected to grow by 13.5 percent in this year, up from 9.8 percent in 2023, according to Aon medical trends report.
At 13.5 percent, the country ranks among African markets with the fastest-rising medical costs, trailing only high-inflation economies such as Nigeria (43 percent), Ethiopia (42 percent), Malawi (27.1 percent) and Zimbabwe (22.5 percent).
The increase in claims has also been linked to higher uptake of insurance covers, particularly employer-sponsored schemes, as well as expanded benefits that encourage greater utilisation of healthcare services.
Disclosures by listed firms show billions of shillings spent annually on staff medical cover, with KCB Group having spent Sh2.37 billion last year as that of Co-operative Bank of Kenya and NCBA Group came in at Sh962.12 million and Sh727.76 million, respectively.
To manage the cost spiral, employers are adopting measures such as higher deductibles, co-payments and tighter claims management as well as reviewing benefit structures, according to Aon.
“To mitigate rising costs and the risks they bring, employers are focusing primarily on hard negotiations with insurance carriers and other vendors,” said Aon.
Medical insurance has a higher market concentration in Kenya. The top five medical underwriters, led by Jubilee Health, AAR and Old Mutual, control over 63 percent of the market, giving them significant influence over pricing and product structures.
The trend of rising claims is unlikely to ease in the near term, as hospitals continue to adjust prices upward and patients increasingly seek specialised care.
