NAIROBI, July 21 – Insurance companies have been asked to reinvent themselves and shed off the poor perception the public has of the industry.
British American Insurance Company (Kenya) Limited, (BRITAK) Managing Director, Stephen Wandera said the poor image of the insurance industry is partly to blame for the low insurance penetration levels in the country.
Wandera noted that there was need to change the perception of the majority of Kenyans that insurance was not affordable.
The BRITAK MD said high capital requirements for investors in the life insurance business, and the continuing realignment of the operating environment including legal and taxation issues was also impacting negatively on the industry.
“Lack of understanding by a majority of Kenyans on the benefits of insurance is also to blame,” he added.
He was speaking at a Nairobi hotel during the 2008 British American Insurance Agent of the Year Awards ceremony.
Wandera said only six percent of the population in Kenya use insurance currently. Out of this, 46 percent or nearly half have a compulsory government social security. Another 40 percent had medical insurance and a paltry 17.6 percent had life insurance.
“The level of insurance penetration as a percentage of the Gross Domestic Product is roughly three percent with life insurance taking up less than one percent of GDP,” Wandera said.
“As regards insurance density, the amount spent on life insurance is about Sh200 whereas the amount spent on general insurance is approximately Sh570.”
He also asked insurance companies to be creative if they are to continue being relevant in the market place, adding that their response to the markets needs of Kenyans was crucial if the industry was to survive.
He said: “More than ever before, there is need for innovativeness in the insurance industry to meet the needs of an increasingly enlightened and investment savvy populace, through the development of simple insurance products and reliable distribution channels.”
The British American Insurance Agent of the year Awards is an annual event used to fete agents of the company who post exemplary performance, surpassing expectations and set targets.
Some 110 agents of the company were rewarded with cash prizes and other gifts.