Kenya Industry Research: Insurance

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Kenyan insurance industry to be positively impacted by successful enforcement of the cash and carry regulation
  • Kenya Industry Research: Insurance
  • Year : Apr 2020
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Summary

Significant reduction in credit exposure coupled with improvements in risk adjusted capitalisation metrics is expected following strict enforcement of the prevailing capital adequacy guidelines, which disallow receivables aged above 30 days and admit 70% of receivable balances aged under 30 days in computing statutory solvency, most insurers have seen an increase in credit risk charges coupled with a significant deterioration in their solvency metrics.

Additional Information

Direct remittance of insurance premiums to underwriters reduces chances of policyholders being prejudiced in terms of receiving compensation upon the occurrence of an insured event. Withholding of premiums exposes policyholders to significant risks as the current cash and carry regulation stipulates that underwriters are not liable for risks arising from an ‘insured event’ when premiums are not remitted to parties assuming such risks.

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