A significant reduction in claims ratio saw AAR Insurance record improved performance in 2019, with a net profit of Ksh 517 million compared to a loss of Ksh 253 million the previous financial year.
Profit before tax also climbed to Ksh 756 million from a loss of Ksh 334 million in 2018. This is a result of growth in revenue, commission earned from reinsurance arrangement, efficient claims management and savings on management expenses.
Net claims fell from Ksh 3.3 billion in 2018 to Ksh 1.7 billion last year as a result of enhanced efficiency in claims management. This was majorly driven by improvement in technology and efficiency in claims processing which led to reduction in claims incurred compared to prior year.
Gross Written Premiums increased by 4.5 percent from Ksh 5.6 billion to Ksh 5.9 billion while operating expenses declined from Ksh 1.1 billion in 2018 to Ksh 1.08 billion.
Income from fees and commissions rose from Ksh 32 million to Ksh 586 million owing to new reinsurance arrangements placed.
Total assets rose from Ksh 3.9 billion to Ksh 4.8 billion, a 24 per cent increase, with shareholders’ funds increasing from Ksh 563 million to Ksh 1.1 billion during the period under review.
AAR Insurance Kenya Managing Director Nixon Shigoli attributed the overall improved performance to a realignment of the business to focus on enhanced efficiency, product innovation and expanding into new market segments.
“Our relentless focus on operational efficiency, tightening claims management, and exploiting new opportunities in the market is paying off. Going forward, we will be expanding our customer relationships, enhancing the client experience and deepening innovation in our distribution ecosystem,” said Mr. Shigoli
AAR Insurance was last year named the most profitable underwriter in the general insurance category by the Insurance Regulatory Authority after it scored the lowest claims ratio in the industry at 37.7 percent.
Apart from enhancing business efficiency, Mr. Shigoli said AAR Insurance is expanding its business portfolio by targeting under-served markets like small and medium enterprises (SMEs) and microinsurance.
In 2019, AAR Insurance rolled an SME medical cover and sealed a partnership with Kenya Women’s Finance Trust (KWFT) to roll out a microfinance product Afyafit for KWFT customers.
AAR Insurance also launched a policy plan that allows customers to make monthly payments instead of paying the full amount upfront, in a bid to increase access to medical insurance especially in the informal sector. It also unveiled a medical insurance policy that allows patients to access treatment without sub-limits.
It also partnered with e-commerce firm CarePay to launch a new service that allows customers to manage medical expenses using their mobile phone.
Moreover, the company last year kicked off an initiative to improve water and sanitation standards in schools, starting in Machakos County where the underwriter partnered with the Kenya Community Development Foundation to construct sanitation blocks for three schools in Wamunyu area. Through the initiative, the company aims to transform the lives of approximately 900 school children annually. It will do this by supporting the construction of 2 showers, 3 sinks and 6 toilets in each partner school.The initiative is part of AAR Insurance’s broader commitment to the Sustainable Development Goals, specifically Goal 3, which deals with Health and Wellbeing, and Goal 6, which deals with water and sanitation.
AAR insurance is the second largest medical underwriter in Kenya with over 100,000 customers.