NAIROBI, Kenya, Mar 16 – Targeting the mass market may be the solution to increasing the low penetration levels within the insurance industry, players in the field said on Monday.
Current penetration levels range as low as 1.82 percent for General Insurance and 0.83 percent for Life Insurance.
This has been blamed on over reliance on investment income, poor distribution networks, lack of professionalism by some industry players and competition that is more focused on price as opposed to quality, among other things.
“Until insurance companies come up with products that target the low end of the population, I can guarantee we will not get anywhere in the bid to bridge this gap,” CFC Life Sales and Marketing Manager Ezekiel Owuor said.
Mr Owuor said CFC Life had embarked on an aggressive distribution strategy that would involve the use of insurance kiosks, personal financial consultants, corporate and broker distribution channels, and alternative channels.
Insurance kiosks involve setting up information points in all kinds of places that attract huge traffic; be it in supermarkets, banks or shopping malls, while personal financial consultants are meant to target the high end of the market.
This they do by offering all kind of advice and information needed for their customers to make informed decisions while purchasing an insurance product.
“Insurance companies have over time relied on agents and brokers who have not necessarily managed to attract the sort of numbers needed to make the difference,” Mr Owuor noted.
He said huge investments in proper distribution channels that target especially the masses have worked well in countries like India and South Africa, whose insurance penetration levels are much better than those of Kenya.
Operations Manager at CFC Life Alice Kirenge said the sector is further hoping that once the legislative aspect is tackled to allow for Bancassuarance the sector would use this platform to increase access for its products.
“We don’t want to talk too much about this legislation because it’s still in the pipeline, however it would work well considering the banked population is much larger than the insurance penetration level numbers,” Ms Kirenge said.
On the other hand, it will be interesting to see how the industry works around the fact that only 30 percent of the Kenyan population is banked, which translates to about five million of the 15 million adults in Kenya having bank accounts.
Meanwhile, Mr Owuor explained the increased launch of different insurance products in the market as another way of surviving the on-going global economic crunch that has seen insurance companies become more aggressive in trying to reach larger numbers to help them survive the hard times.