Nairobi accounted for 81.1 per cent of Kenya’s insurance premiums in 2025, cementing its position as the country’s dominant centre for insurance business, according to data from the Insurance Regulatory Authority (IRA).
The capital’s overwhelming share of insurance premiums was far ahead of other counties, with Mombasa coming a distant second at 3.3 per cent. Kiambu accounted for 2.7 per cent of premiums, while Nakuru contributed 1.8 per cent.
Nairobi’s dominance reflects the concentration of major businesses, banks, financial institutions, government agencies and formal employers in the capital. The city is also home to the headquarters of most of Kenya’s major insurers, creating a strong concentration of insurance activity and corporate clients.
The distribution highlights the significant geographical imbalance in Kenya’s insurance market, with Nairobi continuing to account for the bulk of premiums despite efforts by insurers to expand their reach across the country.
Nationally, however, the insurance industry recorded strong growth in 2025, with gross direct premiums increasing by 16.5 per cent to Sh466.58 billion from Sh400.59 billion in 2024.
The increase translated into nearly Sh66 billion in additional premiums collected by insurers during the year, pointing to continued expansion in demand for insurance products across both long-term and general insurance segments.
Insurance penetration also improved during the year, rising to 2.63 per cent from 2.45 per cent. This marked the highest level recorded in recent years, although the figure remains relatively low compared with the potential size of the Kenyan market.
Insurance density, which measures the average amount spent on insurance premiums per person, also increased significantly to Sh8,675 from Sh7,573.
The growth was largely driven by the long-term insurance segment, whose premiums increased by 23.2 per cent to Sh236.29 billion.
The life fund carried forward also expanded by 22.9 per cent to Sh990.27 billion, while Deposit Administration funds stood at Sh81.22 billion and Personal Pensions at Sh24.54 billion.
The figures point to growing demand for life insurance, retirement savings and other long-term financial protection products as households and businesses increasingly seek ways to secure their financial futures.
General insurance also registered growth, although at a slower pace. Premiums in the segment increased by 9.37 per cent to Sh224.24 billion during the year.
Medical insurance remained the largest class of general insurance, with premiums rising by 22.3 per cent to Sh93.20 billion.
The continued growth in medical insurance premiums comes amid rising healthcare costs and increased demand from individuals, employers and institutions seeking protection against medical expenses.
Motor insurance also remained a major contributor to the industry, with private motor premiums reaching Sh32.82 billion while commercial motor premiums stood at Sh29.78 billion.
The motor insurance segment continues to play an important role in Kenya’s insurance industry because of the mandatory nature of third-party motor vehicle insurance and the large number of vehicles operating on the country’s roads.
Microinsurance recorded the fastest growth during the period under review. Premiums in the segment increased nearly tenfold to Sh2.17 billion from Sh234.23 million in 2024.
The sharp increase suggests that insurers are making greater efforts to reach lower-income consumers and small businesses through products designed around more affordable premiums and simplified access.
Despite the strong growth in premiums, insurers also faced higher claims obligations during the year.
Long-term insurance claims and benefits increased by 15.69 per cent to Sh122.81 billion, while claims under general and microinsurance rose by 14.31 per cent to Sh104.47 billion.
The increase in claims reflects the growing size of the insurance market and the corresponding obligations insurers must meet as more policyholders make claims.
The sector’s balance sheet also strengthened significantly during the year. Total insurance industry assets increased by 20.45 per cent to Sh1.51 trillion, while investments grew by 18.87 per cent to Sh1.31 trillion.
The growth in investments remains important for the industry because insurers rely heavily on investment income to support their operations and meet future obligations to policyholders.
Direct insurers recorded a combined profit of Sh22.37 billion in 2025, while reinsurers posted profits of Sh5.28 billion.
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