NAIROBI, Kenya, Feb 25 – The low uptake of life insurance policies has limited investment in the insurance sub-sector, industry players said on Wednesday.
Old Mutual Group Chief Executive Bertie van Der Walt has said that the investments have tumbled by 46.3 percent from Sh5.5 billion in 2006 to Sh2.9 billion in 2007.
“The uptake of life insurance in Kenya is still dismally low. It is important for industry players to understand the challenges facing Kenyans and reasons why they are not significantly taking up life insurance,” he urged.
It is estimated that only about 500,000 Kenyans have life covers.
Mr van Der Walt observed that for instance, the contribution of the life insurance sector to Kenya’s Gross Domestic Product (GDP) in 2007 was only 0.83 percent, which compares grimly with such countries as South Africa at 15.7 percent.
However, he said that this belied the demand for life covers as demonstrated by the increase of policies issued in 2007, which grew by 11.8 percent to 77,375 compared to that registered in 2006.
Once again he called on his colleagues in the industry to come up with tailor-made and affordable insurance products suitable for Kenyans of all walks of life.
“Such efforts help us take the bull by its horns because we have examples of countries that have boosted life insurance take up among their populations,” said Mr van Der Walt.
He spoke during the launch of the a life insurance product by Old Mutual Life Assurance whose objective is to bridge the gap between growing demand for low-priced insurance products and the supply in the Kenyan market.
Mr van Der Walt said the product dubbed “Rafiki Halisi Life Plan” is aimed at ensuring that millions of Kenyans who previously could not afford life insurance can do so through Old Mutual at a minimum premium of Sh250 per month.
“The life insurance plan is an attractive proposition aimed at providing a simple, flexible and affordable life insurance product to Kenyans,” he added.
The product offers the ‘individual option’ which covers Kenyans aged between 10 to 65 years, and is suited for those who would like to insure themselves only. The ‘family option’ on the other hand gives Kenyans a chance to insure up to four children.
He added that investors who take up this offer would not be required to undergo any medical tests before signing up for the product, whose premiums can be paid monthly or annually.
“As one of the oldest player in life insurance, we have studied our market and our experience indicates that Kenyans are looking for affordable life insurance products to cover them in case of any eventuality,” said the group CEO.