Any company that wishes to underwrite general insurance risks in Kenya must first obtain a licence from the Insurance Regulatory Authority (IRA), the statutory regulator established under the Insurance Act, Cap. 487 of the Laws of Kenya. The licence covers all classes of non-life business, including motor, fire, marine, aviation, engineering, liability, personal accident, and medical insurance. Understanding the fees attached to this licence — and the capital obligations that go alongside it — is essential for any promoter planning to enter the market.
The Regulator: Insurance Regulatory Authority (IRA)
The IRA is responsible for the registration, supervision, and regulation of all insurers and reinsurers operating in Kenya. It issues licences annually, meaning that a general insurer must renew its licence every year and demonstrate continued compliance with the Insurance Act and the IRA’s prudential guidelines.
Current Licence Fees
Until the proposed regulatory changes under the draft Insurance Regulations 2025 take effect, the prevailing licensing fee for a general insurer stands at KES 150,000, which is the same rate that has been in place for approximately three decades. The annual renewal fee follows the same structure.
The IRA has proposed raising the licensing fee for general insurers to KES 500,000 — an increase of KES 350,000 — to reflect the growing cost of regulatory oversight and the authority’s expanded supervisory role. Reinsurers face a steeper proposed hike, with their licensing fee rising to KES 750,000. Micro-insurers are the exception, as the proposals retain their current fee of KES 150,000. The IRA noted in its draft that Kenya’s current fees are significantly lower than comparable fees charged in Uganda and Tanzania, despite Kenya having the more developed market.
Annual fees for insurance intermediaries are also proposed for revision. Insurance brokers and medical insurance providers would see their annual fees jump from KES 10,000 to KES 100,000 under the same proposals.
Minimum Capital Requirements
Fees alone do not tell the full story of the financial commitment involved. To qualify for a general insurance licence, a company must meet minimum paid-up share capital requirements set by the Insurance Act. The current threshold for a general insurer is KES 600 million, while a life insurer requires KES 400 million. A composite insurer conducting both classes requires at least KES 1 billion in paid-up capital. Reinsurers face a higher threshold still.
In addition to paid-up capital, the IRA requires each registered insurer to maintain a statutory deposit with the Central Bank of Kenya, equivalent to 5% of total assets under Section 32 of the Insurance Act. This deposit is held under lien in favour of the IRA and serves as a policyholder protection measure.
Application Requirements
To apply for a general insurance business licence, a promoter must submit the following to the IRA:
- Certificate of incorporation and memorandum and articles of association
- Evidence of paid-up share capital, confirmed by external auditors
- Details of shareholders, directors, and key management personnel
- A detailed business plan covering intended products, market strategy, and three-year financial projections
- A certificate from the Central Bank of Kenya confirming the statutory deposit
- Proposed contract documents with insurance agents and brokers
- A statement covering initial administrative costs
All directors and senior officers must pass the IRA’s fit and proper person test, which assesses financial integrity, professional competence, and suitability. At least one-third of board members must be Kenyan citizens under the Insurance Act.
For a company entering the general insurance market, the direct licence fee is only a minor line item. The far larger financial commitment lies in meeting the minimum capital thresholds and maintaining the ongoing statutory deposit. With the IRA’s proposed 2025 fee revisions now working through public consultation, promoters and existing insurers should factor in higher annual regulatory costs when preparing their business plans and budgets.
Regulated by the Insurance Regulatory Authority (IRA) under the Insurance Act, Cap. 487, Laws of Kenya.