Insurers optimistic of increased penetration by 2020
The Kenyan insurance sector is increasingly leveraging on mobile technology leading to an increase of financial inclusion from 26 per cent in 2006 to 75 per cent currently. Ranked fourth in Africa, the Kenyan insurance sector is scaling the heights to further catapult its penetration as Corporate Watch Magazine’s Felix Boyd reports.
- The Kenyan insurance sector is currently ranked fourth in Africa and continues to leverage on mobile technology leading to an increase of financial inclusion
- AIBK is looking forward to deepening insurance penetration through regional collaboration and tapping into additional opportunities for insurance business
- Most recent data shows that Marine cargo insurance policies have enjoyed 66% growth over the last nine months
In a bid to match the world’s average, local insurers hope to increase penetration to 6 per cent from the current 2.75 per cent by the year 2020.
Speaking at the 12th Annual Association of Insurance Brokers Conference held in Diani, AIBK Chairman Nelson Omolo said, “We are looking forward to deepening insurance penetration through regional collaboration and tapping into additional opportunities for insurance business in areas such as micro insurance, oil and gas, real estate, terrorism & political risks, and agriculture.”
According to the National Treasury, Kenya has leveraged mobile technology leading to an increase of financial inclusion from 26 per cent in 2006 to 75 per cent currently. Noting this, the insurance industry has had to be innovative in order to tap into this newly acquired market by applying more innovation and digitization in their products range and service offering.
“The Kenyan insurance sector is currently ranked fourth in Africa, and we are looking to scale the ladder by doubling our insurance premiums which will largely be attributable to premium growth from the micro insurance segment,’ said IRA Chief Executive Godfrey Kiptum.
In reference to targeting this segment, Jubilee Insurance Chief Executive Patrick Tumbo added that as the largest medical insurer, they have been able to partner with pharmacies and directly certify them so as to make medication more affordable. “This move has allowed our clients access to more affordable options for their medication, especially those of the low-income bracket,” he went on to state.
Also speaking at the event was PS Ministry of Transport Nancy Karigithu, who touched on the growth witnessed in the marine cargo insurance since implementation of the amendment to the Insurance Act. Most recent data shows that Marine cargo insurance policies have enjoyed 66% growth over the last nine months, compared to the same period last year. “Though we had anticipated much higher growth following the implementation of Sec. 20 of the Insurance Act, it was noted that by the very nature of marine business, premiums relating to most importations in the current year had been recorded in the previous year. We are therefore hopeful that the remainder of the year will see higher premium volumes recorded,” she added.
In line with this year’s theme, Harnessing the Future of Insurance, delegates deliberated on a growing middle class, adoption of alternative distribution channels, technology and innovation and regional expansion having been identified as key contributors to the growth of the sector. Recent mergers and acquisitions in the region have also been notable in increasing scale and market share of some of the region’s firms. Commenting on this, Sanlam Kenya Group Chief Executive Officer Mugo Kibati noted that, “business mergers take place in the spirit of partnership and cooperation. By creating synergies in operations, organizations stand to gain more, and the industry as a whole, wins.”
Other issues discussed during the conference include mitigation measures being taken to curb Cyber fraud in insurance, data sharing and investing in awareness, training and education.
The Association of Insurance Brokers of Kenya (AIBK) is the umbrella Professional Association for all Insurance Brokers in Kenya. This year’s conference saw several representatives of the region’s leading insurance firms and wider financial sector come together to discuss pertinent issues related to the industry with the goal of harnessing the future of insurance. Participation was drawn from the EAC Countries and further afield from Zambia represented by a newcomer to the conference, the Zambia Insurance Brokers Association.