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- Overflowing claims choke bank profits in insurance market
Overflowing claims choke bank profits in insurance market
Your daily dose of financial news
Hello 👋
It's Brian from The Kenyan Wall Street.
On our top stories today :
▶️ Insurance services from banks are facing profitability challenges due to surging claims.
▶️ Multichoice releases its half-year results and the figures look somewhat bleak.
▶️ Investors flood t-bills as interest rates start dipping
▶️ A tribute to the late Nuru Mugambi, champion for Kenyan women in the finance sector
🏦 Bancassurance Faces Headwinds as Claims Surge by 140%-AKI
The Association of Kenya Insurers (AKI) has reported that bancassurance is facing profitability pressure because customer claims are becoming too many. Compared to 2019 when claims stood at KSh 6.6 billion, last year the figure was at KSh 14 billion. The surge of motor accidents have possibly driven up these claims because more than 50% of the insurance market is covered by motor insurance. Bancassurance still holds a diminutive share of the industry (at 10%) and it is likely that if more claims choke their profitable prospects, banks will abdicate their insurance services. Read this article to know how the insurance market looked like in 2023.
📡 Multichoice Subscriptions in Kenya Decline by 19% Amid Operational Difficulties
Things are not looking too rosy for DSTV and Go-TV parent company, Multichoice, as it announced a KSh 12 billion loss in its half-year results. The company said that inflation in major markets like Nigeria have stifled revenue, but there could be another greater problem. Mismatched value. Multichoice has hiked the subscription fees for their pay TV services several times this year, prompting uproar from customers. Consequently, the company has lost 1.8 million subscribers. Kenya is not an exception, as the company lost 19% of its subscribers on a Y-o-Y basis. These macroeconomic challenges come at a time when Multichoice prepares to hit the Francophone Africa market after Canal+ finalises its acquisition. Read more about this here…
🪙 Treasury Bill Rates Decline Further to 2023 Levels
Investors are rushing to lock in higher returns from Treasury bills as interest rates decline to levels last seen in August 2023. The Central Bank of Kenya’s resolve to begin the easing cycle in August, as accepted average yields of the 3 papers fell below the 14.00% mark coming in at 13.05% on the 182-day paper, 13.89% on the 364-day paper with the 91-day paper falling to lower levels of 12.79%. Demand for treasury bills was high in this week’s auction, recording a whooping 398.1% oversubscription, which was however slightly lower than the record 409.9% posted a week earlier. Read more to understand why this is a relief for the government.
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Have a great weekend 🙂