Kenya's small insurers struggle as three more placed under statutory management

THE Insurance Regulatory Authority has directed Kenyans to find alternative insurers after three underwriters were placed under statutory management.

The regulator has taken over Trident Insurance Company Limited, KUSCCO Mutual Assurance Limited and Corporate Insurance Company Limited, citing the need to safeguard policyholders, creditors and the wider public.

This is the latest sign of persistent financial stress among smaller underwriters, that has once again brought the sector under renewed scrutiny.

In separate public notices issued on March 10, the IRA said the move was made in accordance with the Insurance Act and is intended to allow an orderly assessment and stabilisation of the companies’ financial and operational positions.

“The Insurance Regulatory Authority has placed Trident Insurance Company, KUSCCO Mutual Assurance Limited, and Corporate Insurance Company under statutory management accordance with the provisions of the Insurance Act,” the regulator said in a statement.

“This regulatory action has been taken to safeguard the interests of policyholders, creditors, and the general public, and to allow for an orderly assessment and stabilization of the companies’ financial and operational positions.”

IRA said that it has appointed the Policyholders Compensation Fund to take control of the management and operations of the affected insurers with effect from March 10, 2026.

Under the statutory management arrangement, the three insurers have been barred from issuing any new insurance policies starting March 11.

Policyholders have been advised to immediately seek alternative insurance cover from other licensed insurers to avoid exposure in the event of claims.

“The regulatory action has been taken to safeguard the interests of policyholders, creditors, and the general public,” the IRA said, adding that it remains committed to maintaining stability, confidence and integrity in the insurance sector.

For affected policyholders, the Policyholders Compensation Fund will step in to compensate claimants in line with provisions under the Insurance Act.

The latest intervention adds to a growing list of troubled insurers in Kenya that have required regulatory rescue in recent years, highlighting the fragile position of smaller insurance firms.

Among those previously placed under statutory management are Blue Shield Insurance, which collapsed after struggling to meet claims obligations, Invesco Assurance, which was taken over by regulators due to financial distress.

Resolution Insurance, which was placed under statutory management in 2022 following prolonged liquidity challenges.

Xplico Insurance Company Limited was placed under statutory management in December 2023 because of solvency and operational issues.

United Insurance Company Limited has also been under statutory management since 2018.

The repeated interventions have raised concerns about the sustainability of small and mid-sized insurers in a market increasingly dominated by a handful of large, well-capitalised players.

Smaller insurers have struggled with thin capital buffers, aggressive pricing to win market share, and rising claims, factors that have quickly erode their financial stability.

Kenya’s insurance penetration remains relatively low at about 2.3 percent of GDP, but the sector has grown increasingly competitive, squeezing margins for smaller firms.

For policyholders, however IRA maintains that the immediate impact is to shift policies to other insurers while awaiting compensation or resolution of existing claims.

The IRA says the statutory management process will allow regulators to determine the true financial position of the companies and chart the most appropriate course of action, which could include restructuring, acquisition or eventual liquidation.