Key Financial Documents that an Insurance Firm Must Have in Kenya

Q: Is IFRS 17 only for insurance companies?

Yes. IFRS 17 is the international accounting standard specifically designed for insurance contracts. It applies primarily to insurance companies and other organisations that issue insurance contracts.

Q: What are the five key financial documents that an insurance firm must have in Kenya?

The five essential financial documents are the Claims Register, General Ledger, Trial Balance, List of Debtors and Creditors, and Bank Statements. Together, these documents form the foundation of an insurance company's accounting records and support a successful external audit.

Key Financial Documents that an Insurance Firm Must Have in Kenya (Simple Guide)

June 26, 2026

Estimated read time: 3 minutes

If you own, manage, or work for an insurance company, understanding the Key Financial Documents that an Insurance Firm Must Have in Kenya can save you a lot of stress when audit season arrives.

These documents help you keep accurate financial records, prepare reliable financial statements, and comply with the requirements of the Insurance Regulatory Authority (IRA).

They also make it easier for your external auditor to confirm that your premiums, claims, investments, and other financial transactions have been recorded correctly.

The good news is that you don’t need to be an accountant to understand these documents.

In this guide by Mugo & Company, we’ll explain the Key Financial Documents that an Insurance Firm Must Have in Kenya in simple language, why each one matters, and how they help you prepare for a smooth external audit.

Let’s get started.

Table of Contents:

What are the Key Financial Documents that an Insurance Firm Must Have in Kenya?
Claims Register
General Ledger
Trial Balance
List of Debtors and Creditors
Bank Statements
Why These Documents Matter During an External Audit
What Does an External Auditor Verify?
Recommended Articles
FAQs
Need Help Preparing for an Insurance Audit?
Disclaimer

What are the Key Financial Documents that an Insurance Firm Must Have in Kenya?

Running an insurance company involves handling thousands of financial transactions every year.

These include:

Premiums received from customers
Claims paid to policyholders
Commission paid to agents and brokers
Investment income
Operating expenses
Bank transactions

Without proper financial records, it becomes difficult to know how your business is performing or prepare accurate financial statements.

That’s why every insurance company should maintain proper accounting records throughout the year—not just when an audit is approaching.

Below are the Key Financial Documents that an Insurance Firm Must Have in Kenya and why they matter.

Need help preparing for an audit of your insurance company in Kenya?

Mugo & Company can help you prepare for your audit, strengthen compliance, and meet Insurance Regulatory Authority (IRA) requirements.

Book a Free Consultation with Mugo & Company Today WhatsApp

1. Claims Register

A claims register is simply a record of every insurance claim made by your policyholders.

It normally includes:

Claim number
Policy number
Customer name
Date of claim
Amount claimed
Amount paid
Outstanding balance
Claim status

Why is a Claims Register important?

Think of your claims register as a tracking system for every claim your company receives.

It helps you:

Track all insurance claims
Monitor unpaid or outstanding claims
Prevent duplicate claim payments
Support your financial statements

During an external audit, your auditor compares the claims register with your accounting records to confirm that claims have been recorded accurately and that your company has set aside enough funds for outstanding claims.

2. General Ledger

If your accounting records had a “master file,” it would be the general ledger.

A general ledger records almost every financial transaction that takes place in your business.

This includes:

Premium income
Claims expenses
Salaries
Rent
Commission expenses
Investment income
Taxes

Every figure that eventually appears in your financial statements starts in the General Ledger.

If your general ledger is incomplete or inaccurate, your financial statements are likely to contain errors too.

3. Trial Balance

A trial balance is a summary of all the balances recorded in your general ledger at a particular date.

Its main purpose is to confirm that your accounting records are balanced.

It helps you check that:

Total debits equal total credits
Your books are balanced
There are no obvious accounting errors

Before preparing your annual financial statements, your accountant will usually prepare a trial balance first.

Your external auditor also relies on the trial balance as one of the starting points when planning the audit.

4. List of Debtors and Creditors

Your insurance company should maintain an updated list of everyone who owes your business money and everyone your business owes money.

a) Debtors

Debtors are people or organisations that owe your insurance company money.

Examples include:

Outstanding premiums
Agent balances
Reinsurance recoveries

b) Creditors

Creditors are people or businesses that your company needs to pay.

Examples include:

Suppliers
Reinsurers
Service providers
Outstanding claims payable

Keeping these records up to date helps ensure that your assets and liabilities are reported correctly in your financial statements.

5. Bank Statements

Your bank statements provide evidence of every payment received and every payment made by your insurance company.

They help you:

Reconcile cash balances
Detect errors
Identify unusual transactions
Support your accounting records

During an audit, your auditor compares your bank statements with your accounting records to confirm that your reported cash balances are accurate.

Why These Key Financial Documents Matter During an External Audit

Preparing these documents isn’t just about satisfying your auditor.

They also help you understand the financial health of your insurance company.

When your records are complete and organised, your audit becomes faster, smoother, and less stressful.

Good financial records also help you:

Prepare reliable financial statements
Strengthen internal controls
Improve financial reporting
Support regulatory compliance
Build confidence with regulators, investors, shareholders, and policyholders

If you’re not familiar with how an audit works, you may also find our guide on What is an External Audit in Kenya? helpful.

It explains the audit process in simple terms and what you should expect before your audit begins.

What Does an External Auditor Verify in an Insurance Company in Kenya?

An external auditor doesn’t just check your financial statements.

They also verify whether the information supporting those statements is accurate, complete, and properly documented.

For insurance companies, an external audit typically focuses on the following areas.

What the Auditor Reviews	What the Auditor Verifies
1. Premium Income	– Your auditor verifies that all premiums collected have been recorded correctly and recognised in accordance with the applicable accounting standards.
2. Claims	– Claims paid and outstanding claims are reviewed to ensure they are genuine, accurately recorded, and properly supported.
3. Commission Expenses	– The auditor reviews commissions paid to insurance agents and brokers to confirm they are accurate and properly authorised.
4. Operating Expenses	– Expenses such as salaries, rent, utilities, and administrative costs are examined to ensure they relate to the business and are supported by appropriate documentation.
5. Investments	– Many insurance companies invest in government securities, shares, fixed deposits, and property. – The auditor reviews these investments to confirm ownership, valuation, and proper disclosure in the financial statements.
6. Cash and Bank Balances	– Bank reconciliations and bank statements are examined to verify that the cash balances reported in your financial statements are accurate.
7. Outstanding Premiums and Agent Balances	– The auditor also reviews outstanding premiums and balances owed by insurance agents to determine whether they are recoverable and correctly presented.

Once the audit is complete, your auditor issues an audit opinion explaining whether your financial statements present a true and fair view of your company’s financial position.

If you’d like to understand the different outcomes, read our guide on Types of Audit Opinions in Kenya.

Why Good Record Keeping Matters

Keeping accurate financial records isn’t just about passing an audit.

It’s about running a better business.

When your records are accurate and up to date, you can:

Make informed business decisions
Detect errors before they become costly
Improve cash flow management
Reduce compliance risks
Build trust with regulators, investors, lenders, and policyholders

In short, the better your record keeping throughout the year, the easier your annual audit will be.

FAQs on the Key Financial Documents that an Insurance Firm must Have in Kenya

1. Is IFRS 17 only for insurance companies?

Yes.
IFRS 17 is the international accounting standard specifically designed for insurance contracts.
It applies primarily to insurance companies and other organisations that issue insurance contracts.

If you’re new to IFRS 17, our Simple Guide to IFRS 17 in Kenya explains what it is and how it affects your financial reporting.

2. What are the five key financial documents that an insurance firm must have in Kenya?

The five essential financial documents are:

Claims Register
General Ledger
Trial Balance
List of Debtors and Creditors
Bank Statements

Together, these documents form the foundation of your accounting records and help support a successful external audit.

3. What kind of accounting do insurance companies use?

Insurance companies prepare their financial statements using International Financial Reporting Standards (IFRS).
They are also required to apply IFRS 17 when accounting for insurance contracts.

Need Help Preparing for an Insurance Audit?

Preparing for an insurance audit involves much more than producing financial statements.

You also need complete financial records, effective internal controls, and compliance with the latest accounting and regulatory requirements.

At Mugo & Company, we work with insurance companies across Kenya to help them prepare for external audits, improve financial reporting, and strengthen compliance with industry regulations.

Whether you’re preparing for your annual audit, implementing IFRS 17, or simply want to improve your financial record keeping, our audit and assurance team is here to help.

Contact Mugo & Company today to learn how we can support your insurance business.