Kenya’s insurance market expanded sharply in 2025, with the amount paid for insurance cover climbing to Sh466.58 billion, the highest level recorded in a decade as life, medical and other insurance products attracted more customers.
The figure represented a 16.5 per cent increase from the Sh400.59 billion collected in 2024, according to the Insurance Regulatory Authority (IRA) 2025 Annual Insurance Industry Statistics.
The rise also lifted insurance penetration from 2.45 per cent in 2024 to 2.63 per cent in 2025. This measures insurance spending against the size of the economy.
The latest penetration rate was the highest recorded since 2016, showing that insurance continued to take a bigger place in the financial lives of Kenyans.
Life insurance was at the centre of the industry’s performance, recording the fastest increase among the main insurance categories.
“Long-term (life) insurance recorded the strongest growth among the mainstream segments, with gross direct premiums increasing 23.20 per cent to Sh236.29 billion,” IRA said in the report.
The growth in life insurance was accompanied by a rise in the value of funds held by life insurers. Assets in life insurance funds went up by 22.9 per cent to Sh990.27 billion, moving them closer to the Sh1 trillion mark.
Savings-linked insurance products also recorded higher business during the year. Deposit Administration premiums stood at Sh81.22 billion, while Personal Pensions premiums reached Sh24.54 billion.
The general insurance market, which includes medical, motor and property cover, also posted an increase, with premiums rising 9.37 per cent to Sh224.24 billion.
Medical insurance accounted for the largest share of this growth after premiums increased by 22.3 per cent to Sh93.2 billion.
Motor insurance continued to bring in a large amount of business. Private motor insurance generated Sh32.82 billion in premiums, while commercial motor insurance brought in Sh29.78 billion.
Microinsurance, however, recorded the most dramatic jump during the year. Premiums in the category rose from Sh234.23 million in 2024 to Sh2.17 billion in 2025, representing an increase of nearly ten times.
The sharp rise in microinsurance suggests stronger interest in low-cost insurance products among individuals and businesses that have traditionally had limited access to insurance services.
As the value of insurance business increased, the amount paid out to policyholders also went up during the year.
Long-term insurance claims and benefits rose by 15.69 per cent to Sh122.81 billion, while payments under general and microinsurance increased by 14.31 per cent to Sh104.47 billion.
The industry also recorded growth in its overall financial base. Total assets held by insurers increased by 20.45 per cent to Sh1.51 trillion.
Investment holdings grew by 18.87 per cent to Sh1.31 trillion, while shareholders’ funds rose 11.01 per cent to Sh257.6 billion.
Despite the increase in costs, insurers remained profitable in 2025. Direct insurers recorded combined profits of Sh22.37 billion, while reinsurers posted Sh5.28 billion in profits.
However, the level of profitability was lower than that of the previous year, with higher finance and service costs putting pressure on earnings.