NAIROBI, Kenya, Oct 2 – The Kenyan insurance industry currently collects Sh55 billion on average every year in local premiums for both long and short term insurance covers.
The Chief Executive Officer of the Association of Kenya Insurance Tom Gichuhi said on Friday premiums collected on general insurance as well as life insurance could be doubled if Kenyans took up insurance.
He added that Kenya\’s insurance industry had the potential to become more vibrant than it was. He noted that only half a million Kenyans currently take up life insurance.
"We have the ability to double these premiums but we need to price our products correctly and collect the premiums on a 100 percent basis. However the insurance penetration right now is very low," he asserted.
He stated that it was necessary to design insurance packages that would meet the needs of Kenyans. This, he said, would increase the number of people taking up insurance covers.
He attributed the low insurance numbers to general lack of interest, lack of enough information and lack of purchasing power among the majority, with over 50 percent of Kenyans living on less than Sh70 per day.
"Most Kenyans would not look out for insurance products to buy because they cannot afford it. Their priority is to feed themselves. They may have the need, but the question is, can they afford it? In addition there are others who may afford it but they do not have the information. This is why we are talking about consumer education. We need to do a lot more as an industry," he declared.
Meanwhile Kenyans\’ insurance policy options continued increasing with insurance providers now looking into political risk covers as well as credit risk insurance covers.
Speaking during the 15th African reinsurance forum in Nairobi, Group Managing Director First Re-insurance Brokers Jacinta Karita held that the new insurance covers targeted both the common citizen as well as international investors seeking to establish their businesses in the country.
While making reference to the 2007 post election violence, Mrs Karita said political risk insurance would cover assets destroyed in the event of civil war or any political oriented unrest while credit risk would cover private investments. She noted that these were not covered by the standard insurance policies.
"Credit deals with the issue of investors. When someone comes to do business in Kenya and they are not very sure about the viability of this area, they would take up the credit insurance such that if anything happened they would get their money back," she explained.
Africa Reinsurance Chief Executive officer, Mr George Otieno said that the credit insurance cover would encourage multinational investors to put up their businesses in Kenya. He further asked Kenyans to tap into the opportunities presented to them.
"The credit policy also covers against confiscation. For instance the government could rationalize some investment. In such a situation, the insurer would be called upon if they had a political or credit insurance policy and they would get back their money. Therefore, this encourages investors not only for Kenya but also for Africa," he stated.