Treasury urges insurance companies to innovate
The Kenyan insurance sector contributes only a third on life insurance premiums against the global average scenario on life insurance business which stands at 54.8 percent.
The poor uptake of life insurance products is linked to bad image associated with Insurance sales and service delivery leaving the public uninformed on the benefits of life cover.
According to National Treasury Cabinet Secretary Henry Rotich, the country’s insurance market is greatly determined by non-life business unlike in the other strong insurance markets.
“In particular, as a service industry, the way in which insurance is perceived is critical to its growth. The poor image of the industry has led to lack of confidence and trust by policy holders and the general public,” CS Rotich said during the rebranding of Pan Africa Insurance to Sanlam Insurance.
Kenya’s non-life premiums contribute two thirds of the total premiums globally which stand at 45.2 percent reflecting a low performance on life assurance market.
Mr Rotich said a lack of qualified sales agents who can inspire public confidence continuous to be an impediment to the overall growth of insurance firms in the country.
Last year, insurance penetration stood at 2.8 percent of gross domestic product (GDP), way below the global average of 6.5 percent of GDP and the 5.0 percent envisioned in the Vision 2030 National Development plan.
Aside the lack of highly skilled marketers, the sector is confronted with low- income, irregular earning patterns, costs of insurance premiums and general apathy towards insurance as a service and product.
The government has however pledged to boost the country’s insurance service sector through its bilateral relations with the Republic of South Africa in order to lift the industry’s profile.
Earlier in the year, Ernst and Young (EY) stated that Kenya’s insurance market is expected to double up come 2018 owing it to a significant upside on premium increase likely to achieve a 6 percent growth rate from the current 3 per cent penetration.
Kenya’s insurance industry paid out claims worth Sh.49 billion last year with the gross premiums amounting to 174 billion reflecting a 10.4 percent increase since 2014.
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