The AAR Insurance Kenya has posted a Ksh404 million profit after tax for the year ended December 31, 2024.
In the financial year results released on April 16, the Insurance Company reported a 673% in profitability.
According to the results, several factors led the group to significant profit growth, including strong revenue performance, a rise in investment income, and reduced operating expenses.
Additionally, the implementation of a digitally focused operational model was instrumental in reducing the operating expense ratio from 7.6% to 6.9%, enhancing the Group’s financial performance.
“The Group achieved a significant 673% increase in profitability. This was driven by strong revenue performance, a rise in investment income, and reduced operating expenses. The implementation of a digitally focused operational model was instrumental in reducing the operating expense ratio from 7.6% to 6.9% enhancing the Group’s financial performance,” said the insurance company.
AAR Insurance Records Ksh404 Million Profit
Profit posted by the insurance company before income tax was Ksh594,665 million.
The group’s insurance revenue for the year hit Kshs 12.298 billion, representing a 42% increase compared to the previous year where it had posted about 10, 696 billion.
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The growth in the insurance revenue was primarily attributed to enhanced customer experience leading to high retention, innovative product offerings and increased intermediary activity supported by strategic partnerships.
Despite a 43.6% rise in insurance service expenses to Ksh11.5 billion, the Group maintained robust profitability through improved operational efficiency and regional expansion.
Growth in Capital Adequacy Ratio and Assets
At the same time, the Company’s Capital Adequacy Ratio (CAR) increased from 118% to 160%, driven by strong performance and a capital injection of Ksh318 million.
The Group’s return on Equity grew to 19% while total assets grew by 36% in line with growth in profitability.
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At the same time the company recognized the milestone it has achieved by expanding its operation to other countries which has been a success.
Also part of the highlights in the full year results was assumption of full ownership and control of AAR Health Services Uganda. The move, AAR noted, is part of its expansion strategy.
“Effective January 1, 2024, AAR Insurance Kenya Limited assumed full ownership and control of AAR Health Services Uganda, in line with our regional expansion strategy marking a key step in our growth journey. For the first time, we consolidated the financial statements of our Uganda subsidiary, as we continue to explore opportunities for further market expansion across the region,” said AAR.
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