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Transport Minister Amos Kimunya launches AAR Insurance Service/CFM

Kenya

AAR enters Kenya’s insurance market

Kimunya noted that out of the 45 licensed insurance companies in Kenya, each is competing for a limited market characterised by low penetration.

“Kenyans’ uptake of insurance cover, both at corporate and personal levels remain predominantly in the motor, fire, industrial and personal accident classes,” he said.

“Low penetration of insurance in the Kenyan market, relative to other more developed markets has attributed to among other factors a general lack of a savings culture among Kenyans, low disposable incomes for the majority of the population, with close to 50 percent of Kenyans living below the poverty line,” he explained.

AAR Health Services has also invested in a new IT business system that will assure integrity and a better analysis of data, ultimately translating to faster processing of claims.

Gakunju confirmed that they will offer both medical and non-medical products, while leveraging the country’s Small and Medium Enterprises to positively drive market penetration of insurance products in the country.

“Our business direction is guided by the region’s huge population base and a large untapped market, which presents an opportunity for us to explore,” he said.

“There are large untapped areas which have not benefited from the upside of insurance. It is these areas that we will focus on in our distribution network as we strive to bring more individuals within the insurance space,” he explained.

He urged for deeper integration within the East African Community to allow companies to set up multiple branches all over Africa registered as one company.

“We hope that one day we can have a true East African Community where we don’t have to have a company in Kenya, Tanzania, Burundi and Rwanda. It should be possible to invest in one country and expand the company across the region,” he said.

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“If we continue having small little companies in small little countries, we cannot be competitive,” he emphasised.

AAR Insurance Limited chairman Kiprono Kittony said that they would like to see greater consolidation of regulations within the EAC.

“We have launched this company at a time when the Customs Union for the EAC has been signed and implemented. We have a market with 130 million people standing 582,000 square kilometres,” he said.

“We hope that regulations will take place between the countries so that protocols are signed to insure that insurance regulations, central bank regulations and stock market regulations are converged to create an environment that makes it easier for private sector players and businesses to do business in this region,” he explained.

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