Liberty Kenya Profit Drops 46% to KSh231 Million as Investment Income Shrinks
The insurer attributed the earnings decline to weaker returns from its investment portfolio, which has traditionally been a key driver of profitability for insurance companies.
Photo: Courtesy.
By Anneth Chepng’etich
Liberty Kenya Holdings Plc has reported a sharp decline in its net profit for the six months ended June 30, 2026, weighed down by lower income from investments following a fall in interest rates.
The Nairobi Securities Exchange-listed insurance group posted a net profit of KSh231 million from continuing operations, a 46 percent drop from KSh428 million recorded in the same period last year.
The insurer attributed the earnings decline to weaker returns from its investment portfolio, which has traditionally been a key driver of profitability for insurance companies.
According to the company’s financial results, net investment income fell by 22.7 percent to KSh1.68 billion, down from KSh2.17 billion in the first half of 2025, reflecting the impact of declining interest rates in the market.
Despite the pressure on investment returns, Liberty Kenya showed resilience in its core insurance business, with underwriting performance improving significantly.
The company’s net insurance service result nearly doubled to KSh448 million, up from KSh225 million posted in the first half of 2025, indicating improved pricing, risk management and claims handling in its life and general insurance operations.
However, the strong underwriting improvement was not enough to offset the drop in investment income.
Liberty also continued to face pressure from high claims in its general insurance business, which remained elevated during the period. The company noted that claims in the short-term business, including motor and medical covers, stayed high, in line with industry-wide trends.
Operating expenses also rose during the period, driven by investment in a major systems migration project. The company described the spending as a one-off strategic investment aimed at modernizing its technology infrastructure and providing the business with access to newer tools and digital capabilities to improve efficiency and customer experience.
The latest half-year results also reflect Liberty’s exit from the Tanzanian market. The company left Heritage Insurance Company Tanzania Limited in April 2025 after more than two decades of operations in the country, as part of a strategy to focus on its core Kenyan business.
As a result, the Tanzania business recorded no contribution to earnings in the first half of 2026, compared with a loss of KSh168 million reported in the same period last year, slightly cushioning the group’s overall performance.
The decline in profit has affected returns to shareholders. Basic and diluted earnings per share from continuing operations dropped to 43 cents, down from 80 cents recorded in the first half of 2025.
Liberty Kenya Holdings said it remains focused on strengthening its insurance operations, tightening claims management and improving operational efficiency despite the challenging investment environment and elevated claims.
The Board of Directors did not recommend an interim dividend for the six months ended June 2026, choosing to preserve capital for ongoing investments and future growth.
Analysts say insurance firms are facing a tough balancing act as lower interest rates reduce investment income while high claims and rising reinsurance costs continue to pressure underwriting margins.
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